On Friday, both US and Brent crude futures’ prices had inched lower, though both of the futures’ prices had pummelled more than 2 per cent on the week over concerns of a likely rise in crude oil supply in coming weeks, while a pandemic resurgence in several parts of the world stoking frets of a second round of forced businesses closures had stepped up demand concerns.
In point of fact, Brent and US WTI (West Texas Intermediate) crude oil futures’ prices had registered a weekly percentage gain of 9.60% and 8.22% respectively last week, but this week’s fundamentals had largely curved downwards due to a potential supply glut over the coming weeks.
Oil edges lower as supply concerns loom
Citing statistics, on Friday’s commodity market wind down, the UK crude futures’ prices fell slightly to wrap up the day at $41.92 per barrel, while the US West Texas Intermediate crude oil futures’ prices edged down to end up the session at $40.25 a barrel.
Nonetheless, for the week, Brent crude futures shed 2.9 per cent, while the US WTI crude oil futures had foundered 2.1 per cent. In factuality, apart from a likely rise in crude oil supplies over the coming weeks, a strident spike in pandemic cases across the United States, the world’s largest oil consumer, had hindered business activities and rekindled possibilities of a second round of mandatory shutdown, eventually leading to a sell-off wave of the crude oil futures’ prices.
Apart from that, according to data from US EIA (Energy Information Administration), fuel consumption across the United States remained utterly sluggish as the pandemic resurgence had been hampering travels and business recoveries, while the four-week average of petroleum demands in the US fell by 9 per cent last week compared to the same time a year earlier.
Aside from a deeper demand concerns in the US, outputs in the oil refineries fell by 26 per cent last month in India on a year-on-year basis. Adding further strains on to a beaten-down crude oil futures’ prices, analysts have been predicting that more crude oil would likely to make entrance into the market as early as by next week, eventually pushing the prices lower as the US oil and gas rig counts rose to 261 for the week that ended on September 25, data from Baker Hughes Co.
had unveiled. On top of that, while Libya had boosted its crude oil production in August, tanker tracking data had unfurled that the Iranian oil exports had witnessed a sharp spike in September despite a raft of US sanctions aimed at crippling the nation’s core source of revenues.
Meanwhile, addressing to a growing concern of a second wave of pandemic outbreak which in effect would likely to freeze the global oil demand for the second time this year, a senior analyst at Price Futures Group in Chicago, Phil Flynn said on the day’s commodity market wrap-up, “There is this second wave of fear overhanging the oil market at this point and that’s holding us back. ”