Oil slips on weak demand outlook and higher OPEC supplies

Oil prices fell on Thursday as rising coronavirus cases dampened the demand outlook, with further price pressure from a rise in OPEC output last month, though losses were capped by renewed hopes for U.S. fiscal stimulus. Brent crude futures fell 17, or 0.4%, to $42.13 a barrel by 0818 GMT and U.S. West Texas Intermediate (WTI) crude futures were down 22 cents, or 0.6%, at $40.

“It has become evident that the virus has not been contained. Infection rates are going up, the global death toll has surpassed the 1 million mark and the world is becoming a gloomy place once again,” said PVM Oil analyst Tamas Varga. In the United States alone the pandemic has infected more than 7.2 million and killed more than 206,000.

Increasing oil supply from the Organization of the Petroleum Exporting Countries (OPEC) also weighed on the market, with output in September up 160,000 barrels per day (bpd) from August, a Reuters survey found. The rise was largely on the back of higher supplies from Libya and Iran, both exempt from an oil supply pact between OPEC and allies led by Russia, a grouping known as OPEC+.

Prices received some respite from progress in U.S. talks on a stimulus package for the world’s biggest economy. U.S. President Donald Trump’s administration has proposed a new stimulus package worth more than $1.5 trillion.

Oil slips on weak demand outlook and higher OPEC supplies, Reuters, Oct 1