Oil plunged to below $42 a barrel today, marking its fifth consecutive, driven by fears that the recovery in global demand may falter as fears of a second wave of the pandemic mount.
A Reuters analysis over Labor Day weekend showed that coronavirus cases have risen in 22 out of 50 US states, and there are also upticks in India and the UK.
Brent crude fell 1.5% to $41.44 a barrel, its lowest level since July 1st. Yesterday saw a further drop after Saudi Aramco lowered its official selling prices for October for its Arab light oil, a sign of sluggish demand.
Both benchmarks for oil have fallen from the ranges they traded in throughout August, and Brent has fallen more than 8% since the end of August.
However, oil has recovered from its historic lows recorded in April, thanks to a record supply cut by OPEC+. The producers will meet on September 17th to review market conditions.
Crude oil has also found support from the weakening US dollar, despite the greenback's gains on Tuesday.
