Crude-oil futures on Monday were edging modestly higher, reversing some earlier weakness that had been sparked by growing concerns about the impact of rising coronavirus cases throughout the globe.
Those concerns were amplified after major energy officials said that they see challenges for prices climbing substantially in the fourth quarter, citing an uneven recovery from the pandemic that has unsettled much of the developed world and harmed energy uptake.
Russian Energy Minister Alexander Novak, speaking at an online conference of energy ministries from G-20 countries over the weekend, said that oil demand has stabilized in recent months but could fall by up to 10%, Reuters reported. The energy minister attributed his slumping demand outlook to the possibility of a second wave of the COVID-19 pandemic.
The global tally for confirmed cases of the coronavirus that causes COVID-19 climbed to 31.1 million on Monday, according to data aggregated by Johns Hopkins University, while the death toll rose to 998,074, nearing the grim one-million mark.
Meanwhile, Chris Bake, executive committee member at the world’s biggest independent oil trader Vitol Group, concurred with Russia’s view, saying that oil prices in the fourth quarter will be vulnerable due to fresh limitations that some countries were reinstating due to a resurgence of the epidemic.
“It doesn’t feel like we have a huge catalyst,” Bake said, speaking at a conference hosted by Gulf Intelligence, adding that the outlook now appears more uncertain than it did weeks ago, Bloomberg News reported.
“The demand side of the equation will continue to be under threat during the fourth quarter of the year, with Covid-19 cases rising at an alarming rate, notably in Europe, which has already imposed new restrictions to curve down the number of cases,” wrote Paola Rodriguez-Masiu, senior oil markets analyst at Rystad Energy in a Monday note.
West Texas Intermediate crude for November delivery was trading 10 cents, or 0.3%, higher at $40.35 a barrel on the New York Mercantile Exchange.
Front-month November Brent traded 9 cents, or 0.2%, higher at $42.01 a barrel. The November contract expires at the end of Wednesday trading.
December Brent, the most actively traded contract, rose 7 cents, or 0.1%, to reach $42.48 a barrel of the ICE Europe exchange.
Last week, based on the front-month contracts, WTI, the U.S. benchmark, declined 2.6% for the week, and global benchmark Brent crude marked a weekly loss of nearly 2.9%, according to Dow Jones Market Data.