Oil Price Fundamental Daily Forecast – Demand Concerns Return to Forefront as Oil Slips Over 1%
US West Texas Intermediate and international benchmark Brent Crude Oil futures are trading lower and appear to be heading for a second straight loss of 1% on Monday as US producers resumed production after the Hurricane Delta and after a labor strike that affected Norwegian production an end.
At 09:13 GMT, December WTI crude is trading at $ 40.34, down $ 0.57, or -1.39%, and December Brent crude is trading at $ 42.33, which is one A decrease of $ 0.52 or -1.21%.
Oil prices are falling after the end of the Norwegian oil workers' strike
Oil prices are falling in anticipation of an increase in crude oil production after oil workers end their strike in Norway. Norwegian oil companies signed a collective agreement with union officials on Friday, ending a ten-day strike that threatened to cut the country's oil and gas production by nearly 25% this week.
Hurricane Delta will cease most of US offshore oil production in 15 years
Hurricane Delta, which dealt the biggest blow to power generation in the US Gulf of Mexico in 15 years, was downgraded to a post-tropical cyclone over the weekend. Employees returned to the production platforms on Sunday and Total SA worked to restart the Port Arthur, Texas refinery at 225,500 barrels per day.
The Colonial Pipeline, the largest oil products pipeline in the United States, had to close its main distillate fuel line after the hurricane cut electricity, the company said on Sunday.
In other bearish news
US energy companies added oil rigs for the fourth consecutive week last week, data from Baker Hughes showed on Friday. In Libya - a member of OPEC - production is expected to rise to 355,000 barrels a day on Monday after force majeure on the Sharara field was lifted from Sunday.
Traders are also focused on the November US election, which could change the energy policies of the world's largest oil consumer and one of its largest producers. Several analysts expect hopeful US President Joe Biden to strike a deal with Iran that could lead to more oil shipments. However, Goldman Sachs believes the news would not lower prices much as the increases would likely be gradual.
The low demand related to coronavirus is coming to the fore again with the lifting of the stalemate in the Gulf of Mexico and the end of the strike in Norway. This helps to top it off in the short term and could result in a significant backtrack to the recent rally with short cover.
Markets could find support in the short term, however, if US House of Representatives Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin even approach a partial deal on additional fiscal stimulus. Of particular interest to the oil market will be a deal to provide US airlines with a rescue package.
In our economic calendar you will find all economic events of today.
This article was originally published on FX Empire
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