Crude oil pummels to five-month lows on renewed pandemic lockdown

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Crude oil pummels to five-month lows on renewed pandemic lockdown

On Thursday, both US West Texas Intermediate and UK crude oil futures’ prices had extended their recent leg of losses into the second consecutive session and headed towards reporting their worst weekly percentage decline since early-April, as a renewed forced business closure measures in a raft of major global economies in the United States and Europe had ratcheted up worries over a likely demand crunch in a near-term outlook.

On top of that, a lack of transparency on US stimulus bill had added to further strains on crude oil futures despite a robust economic recovery in China, the world’s second-largest economy.

Crude oil tumbles 4 per cent over a likely supply glut

In point of fact, Thursday’s tottering of the crude oil futures’ prices came against the backdrop of a flurry of negative fundamentals including a rise in Libyan crude output alongside a delay in the US pandemic stimulus package, while earlier in the day the White House Chief Economic Advisor was quoted saying that a US stimulus bill had to wait at least until the US Presidential election, which analysts said might end up in a prolonged courtroom battle, had the Democratic challenger Biden been elected.

Besides, while the pandemic-led renewed restrictions in a raft of European countries that in effect would likely to hinder the economic recoveries, had weighed on market participants’ morale, a likely supply glut in the crude oil market had fanned up the flames further.

Quoting statistics, after falling as much as 5 per cent on Wednesday, Thursday’s commodity market had witnessed another session of catastrophic plunge of crude oil futures that had pulled the black gold prices down to a nearly five-month low, while on the day’s commodity market round off, the UK crude futures’ prices ended up the session down by 4.2 per cent to $37.45, its lowest in five months, and the US WTI crude oil futures’ prices were pummelled 4 per cent to $35.89 per barrel.

Nonetheless, earlier in the session, US crude futures fell to their lowest level since mid-June at $34.92 per barrel. Meanwhile, addressing to a renewed lockdown which would likely to curb out the crude oil futures’ demand in a near-term outlook, a director of energy futures at Mizuho in New York, Bob Yawger said, “People are reacting to COVID cases that are spiking - they are reacting to the number of new cases,” adding the market had been under additional pressure on demand concerns alongside a delay in US stimulus package.