Oil prices depreciated for the second day in a row on Wednesday, with an upward drift in Covid-19 infections heightening fears that additional curbs on economic activity around the world might hinder fuel demand recovery, Reuters reported.
Brent crude dipped by 61 cents, or 1.49%, to $40.42 per barrel by 12:21 West Africa Time while United States’ West Texas Intermediate fell 34 cents, or 0.87%, to $38.95.
Bonny Light, Nigeria’s premium oil grade, dropped $1.25 or 3.02% to $40.11 on Tuesday.
Qua Iboe, another major national oil grade, declined by $1.40 or 3.37% to $40.18 earlier on Wednesday.
Brent and WTI were weaker by over 3% on Tuesday as the global coronavirus cases crossed a million after soaring by around 50% within three months.
Avtar Sandu, senior commodities manager at Phillip Futures said “the increasing number of COVID-19 cases continues to raise alarm bells on energy demand.”
“Concerns about stagnating demand and the return of Libyan exports continue to put pressure on oil prices,” said Norbert Rucker of banking group Julius Baer.
Sarir oilfield in Libya resumed production after a shutdown of eight months, an area that was contributing 300,000 barrels (bpd) per day prior to the blockade.
The heads of the worlds’ largest trading firms are anticipating a feeble rebound of oil demand a slow place in price movement in the months ahead and possibly in years to come.
U.S. biggest oil refiner, Marathon Petroleum Corp commenced job cuts on Tuesday according to sources.
Royal Dutch Shell also announced a similar move to cut 9,000 jobs.
It is probable that the Organization of the Petroleum Exporting Countries (OPEC) will not expand oil production as proposed from January 2021 in order to check weakening demand, major oil producers said Tuesday.
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