Oil futures slumped Monday, looking to extend last week’s decline, as COVID-19 cases in the U.S. and Europe continue to surge, raising alarm over demand for crude.
West Texas Intermediate crude for December delivery, the U.S. benchmark, fell 90 cents, or 2.3%, to $38.95 a barrel on the New York Mercantile Exchange. The global benchmark, December Brent crude dropped 89 cents, or 2.1%, to $40.88 a barrel on ICE Futures Europe.
“Soaring COVID-19 cases are sparking fears, oil prices are falling. That is how easily the current situation on the oil market can be summed up, as record numbers of nearly 500,000 new cases world-wide on several consecutive days not only highlight the risks posed by immediate transport restrictions but also dampen long-term demand expectations,” said Eugen Weinberg, commodity analyst at Commerzbank, in a Monday note.
Confirmed cases of COVID-19 climbed to 43 million world-wide on Monday, according to data compiled by Johns Hopkins University, while the death toll rose to 1.15 million. European countries have tightened restrictions on activity in response to surging cases, while the number of U.S. infections saw a record daily rise on Friday, surpassing the previous peak from July.
Meanwhile, news on the supply side of the equation was also a negative, analysts said. Libya’s National Oil Co. at the end of last week lifted force majeure on remaining major oil terminals. A blockade by a militia was lifted in September, but not all facilities had yet come back on line.
According to Reuters, the state-owned oil company said Libya’s output would rise to 800,000 barrels a day within two weeks and 1 million barrels a day within four weeks.