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Increased COVID-19 cases threaten recovery in oil demand recovery

15 Oct 2020 12:21 PM

Oil prices are declining today, losing yesterday's gains as a global spike in COVID-19 cases reinforces concerns about economic growth and the recovery of fuel demand.

Several European countries are currently implementing curfews and renewed lockdowns. India - in route to overtaking the US as the country with the most COVID-19 cases - is preparing for a second wave in the coming weeks as it heads toward its main holiday season. It is worth noting that India is the third-largest consumer of oil in the world.

Brent crude futures are down to $42.18 a barrel at the time of writing, while WTI crude futures are down to $40.29.

Yesterday, the International Energy Agency (IEA) said that a second wave COVID-19 may complicate producers' efforts to balance the market.

Crude oil achieved some gains yesterday following a report from the American Petroleum Institute showing a decline in US crude inventories last week. The US Energy Information Administration is scheduled to release its data on oil inventories today.

Meanwhile, OPEC+ has reported ahead of its technical committee meeting today that it complied with its agreement to reduce oil supplies in September by 102%.

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