Oil prices have fallen by 5% and may continue to fall

2020-09-22 12:25:24
Machine translation
Oil prices have fallen by 5% and may continue to fall

Yesterday, oil prices fell sharply on negative statistical data on the impact of the pandemic and the news about the intentions of Libya to resume oil supplies to the world market.


the Number of infected Covid-19 in the world exceeded 31 million people, and deaths of 1 million people, of which 200 thousand – in the United States. Experts warn of the approach of the second wave of the pandemic, which will be significantly more powerful than the first. Strengthening of quarantine restrictions in some EU countries soon will again reduce the demand for oil.


against the expected reduction in oil demand caused by the pandemic Covid-19, and the failure of some members of OPEC+ commitments to reduce production in the summer, the news of the restoration of the Libyan Oil company National oil production in the East has fallen off the world price. This was preceded by the statement of the commander of the Libyan national army (LPA) of the Caliph Haftarot on the withdrawal of the eight-month blockade of oil fields and ports the result of an agreement with the government of Tripoli, recognized the UN. Oil production in Libya before the blockade was 1.3 million barrels/day, after it was reduced to 100 thousand barrels/day, and now, according to estimates by the Wall Street Journal, the daily will grow to 220 thousand barrels.


November futures for Brent crude oil during yesterday's trading declined by 5% to 41 $/barrel and later recovered to 41.6 $/barrel, while October futures on WTI fell by 5.8% to 38.74 $/barrel and is now trading at 39.5 C $/barrel.


Extra kick in the price of oil will cause the presentation Battery Day where Elon Musk will present a new battery type for electric vehicles in 1.5 times cheaper than the existing ones, which will significantly reduce the cost of electric vehicles compared to conventional cars and end the era of internal combustion engines. The increased use of electric cars will reduce oil demand and increase pressure on prices of crops, which are now used for biofuel production: corn, canola, vegetable oils and sugar cane.

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