On October 26, the U.S. WTI crude oil futures market prices fell sharply, with the settlement price of main contracts at 38.56 US dollars / barrel, down 1.29 US dollars or 3.24%. Brent crude oil futures market prices fell, with the settlement price of main contracts at $40.81/barrel, down $1.26 or 2.99%. Oil prices fell sharply on Monday, extending last week’s decline, mainly due to the continued surge of new cases in the United States and Europe, and concerns about oversupply caused by the recovery of crude oil production in Libya.
Oil prices have been falling since last week. According to the statistics of business association, from the high point of last Wednesday to the 26th, the overall decline of WTI is 7.53%, and that of Brent crude oil is 5.44%. In particular, WTI has fallen below the $40 mark. At present, it is still a short-term drop caused by worries about the prospect of fuel demand, mainly affected by the epidemic situation in Europe and the United States.
Specifically, the number of new cases announced in the United States on Friday and Saturday hit a new high. On Monday, the European and American stock markets fell sharply, with the Dow Jones index falling nearly 1000 points in the intraday trading, and the decline narrowed in the end. Finally, it still fell by 650 points, especially energy stocks generally fell, and risky assets were sold again, which dragged down oil prices. In addition, the European side is not optimistic. France added more than 50000 new cases on Sunday, which also set a record. Italy and Spain implemented new restrictions to curb the spread of the virus. While the epidemic spread widely, protests in some countries also occurred frequently, and panic was further amplified. It is expected that more countries will also take restrictive activities, which will crack down on gasoline and other things Fuel demand, drag crude oil recovery process.
In addition, there are certain risks on the supply side, the latest news shows that Libya lifted the blockade and the crude oil production of the national oil company (NOC) increased rapidly. NOC said on Monday it had instructed El feel operators to resume production. Libya’s crude oil output will rise to 800000 B / D in two weeks and 1 million B / D in four weeks, the company said in a statement on Friday. The new supply is bound to put pressure on the current supply pattern.
The business club believes that in the context of weak demand, whether oil prices can be stable or not, the market still pays more attention to the production reduction policies of OPEC + oil producing countries. Although OPEC + is still in the implementation period of the production reduction agreement, and the implementation strength has been commendable for a time, the oil market is looking for a rebalancing pattern after the demand has cooled again. It is unlikely that OPEC + will continue to increase its efforts on the basis of the current production reduction. Moreover, there are big differences within the organization, and it is difficult to reach a new consensus agreement in the short term. Therefore, it is expected that there will still be downward risks in oil prices in the near future.
