Oil prices slip as rising coronavirus cases stokes demand concerns

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Oil prices slipped on Wednesday on concerns that fuel demand will continue to falter as rising coronavirus cases across Europe and in the United States, the world’s biggest oil consumer, could impede economic growth.

The Organization of the Petroleum Exporting Countries (OPEC) said in its monthly report on Tuesday that oil demand in 2021 will rise by 6.54 million barrels per day (bpd) to 96.84 million bpd, 80,000 bpd less than its forecast a month ago, as a result of the economic dislocations caused by the coronavirus pandemic.

Brent crude futures for December fell by 12 cents, or 0.3%, to $42.33 a barrel by 0355 GMT while U.S. West Texas Intermediate futures were down 11 cents, or 0.3%, to $40.09.

The heads of two of the world’s biggest oil producers, Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman, discussed the current situation in the energy markets during a telephone call, the Kremlin said on Tuesday.

“Oil prices are steady in Asia as the dollar rally takes a break and as the Russian and Saudis show a united front in making OPEC+ oil producers live up to their pledged output cut promises,” said Edward Moya, a senior market analyst at OANDA.

“Crude prices are looking very vulnerable as the coronavirus continues to spread like wildfire across Europe and trending higher in the U.S.,” Moya added.

U.S. crude oil inventories were seen falling last week, while distillate stockpiles likely declined for a fourth week, a preliminary Reuters poll showed on Tuesday.

The poll was conducted ahead of reports from American Petroleum Institute and the Energy Information Administration. Both the reports were delayed by a day because of the Columbus day holiday on Monday in the United States.

Source: Reuters

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