Oil Price Tumbles for the Week with Looming Oversupply
Oil price extends losses, bringing the losing streak recorded during the week to another high.
Crude oil tumbled by 5% on Wednesday, pushing the threshold below $40 per barrel’sbarrel’s psychological danger zone.
At one point of the week’sweek’s session, West Texas Intermediate crude futures edged down by 8 cents, translating to a 0.21% drop.
The US benchmark currently trades at $37.31 per barrel, with no bullish events to anticipate before the regular trading day’s resumption.
Similarly, Brent crude futures followed the downward trend after slashing 12 cents or 0.31% during the same period.
The European benchmark went below the critical trading price after settling at $39 per barrel.
The successive retreat of energy commodities is driven majorly by renewed restrictions, mostly across Europe, in an attempt to curb the spread of the virus in the continent.
Respective governments of the European Unions’ leading economies, France and Germany, announced their prospects to put their countries on renewed national lockdowns that are believed to last for a month.
Along with the news and the incumbent lukewarm air travel, investors are worried about another round of mounting supply as the aviation industry is one of the biggest fuel importers in the market.
Across the globe, the rising number of infections worldwide urged analysts to lower their expectations on demand for commodities picking up anytime soon.
Global imports remain sluggish, worsened by renewed mobility restrictions imposed one after another.
Adding an insult to the injury, rising outputs in stockpile dampen prospects for the oil price hike.
The latest report released by the American Petroleum Institute revealed a more than 4-million barrel rise for the week.
Libya Adds to the Burden
The API’sAPI’s update is supported by the EIA’sEIA’s report, which showed that US crude stockpiles rose by 4.3 million barrels for the week ending October 23.
Industry experts urge the OPEC and its allies to put the scheduled tapering of production cuts in January with the setbacks incurred.
According to commodity news, the association is set to revise its supply curb, which currently stands at 7.7 million barrels per day to 5.7 million barrels per day by January 2021.
Just as when oil price remains volatile throughout the period, Libya added to the already burdensome situation.
The country opened the last of its vital oil fields called El Feel or Elephant field on Monday.
Upon resumption, experts in the field believe that supply in Libya currently stands at 680,000 barrels per day.
