Oil prices slide on expectations of higher supply, weaker demand
Crude oil prices fell on Monday on expectations of increasing supply, while higher energy costs and rising COVID-19 cases are also seen weighing on demand.
Brent crude futures fell 96 cents, or 1.2%, to $81.21 a barrel, as of 1036 GMT. U.S. West Texas Intermediate (WTI) crude lost 73 cents, or 0.9%, to $80.06 a barrel.
Oil markets have dropped for the last three weeks, hit by a strengthening dollar and speculation that President Joe Biden`s administration might release oil from the U.S. Strategic Petroleum Reserve to cool prices.
"Possible releases of oil from U.S. strategic petroleum reserves (SPR) get lots of the blame from the decline in price," SEB chief commodities analyst Bjarne Schieldrop said.
"The more likely reason for the current oil price weakness is rising COVID-19 infection rates and associated concerns for global oil demand on the back of lockdowns or restrictions."
U.S. energy firms this week added oil and natural gas rigs for a third week in a row with crude prices hovering near a seven-year high, prompting some drillers to return to the wellpad.
The oil and gas rig count, an early indicator of future output, rose by six to 556 in the week to Nov. 12, its highest level since April 2020, energy services firm Baker Hughes Co said on Friday.
See Zee Business Live TV Streaming Below:
Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC) last week cut its world oil demand forecast for the fourth quarter by 330,000 barrels per day (bpd) from last month`s forecast, as high energy prices hampered an economic recovery from the COVID-19 pandemic.
Europe has become the epicentre of the COVID-19 pandemic again, prompting some governments to consider re-imposing unpopular lockdowns, while China is battling the spread of its biggest outbreak caused by the Delta variant.
Russia`s Rosneft, the world`s second-biggest oil company by output after Saudi Aramco, warned on Friday of a potential "super cycle" in global energy markets, raising the prospect of even higher prices as demand outstrips supply.
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.
RECOMMENDED STORIES
SBI 444-day FD vs Union Bank of India 333-day FD: Know maturity amount on Rs 4 lakh and Rs 8 lakh investments for general and senior citizens
Power of Compounding: Salary Rs 25,000 per month; is it possible to create over Rs 2.60 crore corpus; understand it through calculations
New Year Pick by Anil Singhvi: This smallcap stock can offer up to 75% return in long term - Check targets
PSU Oil Stocks: Here's what brokerage suggests on these 2 largecap, 1 midcap scrips - Buy, Sell or Hold?
Power of Compounding: How many years it will take to reach Rs 2 crore corpus if your monthly SIP is Rs 3,000, Rs 4,000, or Rs 5,000
Retirement Calculator: 40 years of age, Rs 50,000 monthly expenses; what should be retirement corpus and monthly investment
05:04 PM IST