Home / news / Corona and the increase in supply threaten the black gold … Oil drops 3% in a week

Corona and the increase in supply threaten the black gold … Oil drops 3% in a week

Oil fell on Friday, recording a weekly decline of about 3% with the increase in the rate of infection with the Coronavirus “Covid-19” around the world, at a time when oil supplies are set to increase in the coming weeks.

Brent crude was settled at $ 41.92 a barrel, an increase of two years, while US West Texas Intermediate crude fell 6 cents to $ 40.25 a barrel.

But on a weekly basis, Brent lost 2.9%, while West Texas Intermediate lost 2.1%.

In the United States – the largest consumer of oil in the world – the rate of injuries increases in the Midwest, while New York City – which was the most affected in the spring – is considering renewing the closure measures.

And the country witnessed the death of more than 200,000 people as a result of the virus. Fuel demand in the United States remains stagnant as the pandemic restricts travel and undermines the recovery of the economy.

The average demand for gasoline in 4 weeks decreased by 9% from its level a year ago.

In other parts of the world, daily increases in HIV infections are reaching record levels and new restrictions are imposed, which will likely restrict travel.

Oversupply

The entry of more crude oil to the world market threatens to increase supply and reduce prices. Baker Hughes, the energy services company, said that the number of US oil and gas rigs rose to 261 in the week ending on September 25th.

Libya also increased its production, and Shell temporarily leased the first crude tanker being loaded at the Libyan port of Zueitina since last January.

Last Thursday, the Chairman of the Board of Directors of the National Oil Corporation in Libya, Mustafa Sanallah, expected a gradual rise in oil exports during the coming days and weeks, after it reached its lowest levels in May.

Meanwhile, three assessments based on tanker tracking data indicated that Iran’s oil exports rose significantly in September in defiance of US sanctions.

Oil prices were negatively affected, as well, by statements quoted by Iraqi Oil Minister Ihssan Abdul-Jabbar last Thursday, which stated that Iraq is about to reach an agreement with the “OPEC +” group regarding exempting the country facing a severe financial crisis from agreed production cuts. The ministry spokesman later denied it.




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