Connect with us

Business News

Oil Falls 2% on Oversupply Fears, Surging COVID-19 Cases

Published

on

By Adedapo Adesanya

Oil prices fell more than 2 per cent on Wednesday after warnings of potential oversupply and COVID-19 cases in Europe increased the downside risks to demand recovery.

These twin issues battered the Brent crude futures by $2.13 or 2.58 per cent to $80.30 a barrel and crushed the West Texas Intermediate (WTI) crude by $2.49 cents or 3.08 per cent to $78.27 per barrel.

The market swayed fully to the bearish side as signals from The International Energy Agency (IEA) and the Organization of the Petroleum Exporting Countries (OPEC) both said that more supply could be on the way in the coming months.

On its part, the IEA said an oil market rally may ease off as prices that hit a three-year high last month help push up global supply, particularly in the United States.

The Paris-based agency noted in its monthly oil report that the world oil market remains tight by all measures, but a slide from the price rally could be on the horizon due to rising oil supplies.

Current prices provide a strong incentive to boost (US) activity even as operators stick to capital discipline pledges, it said.

This is happening as OPEC and its allies (OPEC+) is seeking to maintain a steady increase in output.

Other nations, including the United States, have called for OPEC+ to boost output more swiftly, which has been to no avail.

Instead, it is also seeing signs of an oil supply surplus building from next month, according to the group’s secretary-general, Mr Mohammed Barkindo, who said its members and allies will have to be “very, very cautious” when they review output policy at regular monthly meetings.

“The surplus is already beginning in December. These are signals that we have to be very, very careful,” he said.

New waves of COVID-19 cases in Europe which drove some governments to reimpose restrictions also weighed on prices.

These overrode information from the US Energy Information Administration (EIA) which said crude oil inventories fell by 2.1 million barrels last week, compared with expectations for a build of 1.4 million barrels.

Also, the market is monitoring plans by the US to release oil from the Strategic Petroleum Reserve, though it is generally used during natural disasters or supply disruptions usually caused by wars.

Advertisement
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

News20 mins ago

APC: Court to hear suit seeking dissolution of Buni-led caretaker c’ttee Dec 17

News42 mins ago

Three kidnapped Ogun church members rescued, suspected rapist arrested

News1 hour ago

N’Assembly, NGF fault UK travel ban, demand reversal

News1 hour ago

Qatar Airways, Hamad airport unveil ‘fly and win’ campaign

World2 hours ago

Video: Robert Spencer’s post-debate review on Reason and Theology

News2 hours ago

Ikoyi building: Sanwo-Olu vows to deal with saboteurs in govt, awaits panel report

News2 hours ago

Four Ekiti men remanded for stealing laptop, phones

News3 hours ago

COVID-19 force majeure over vaccines

News3 hours ago

ICPC probes 52 teaching hospitals over N49.4bn intervention fund spending

News3 hours ago

Niger PDP removes ex-gov Aliyu as party leader, picks senator

News4 hours ago

Kwara gov signs law reserving 35% of appointments for women

News4 hours ago

Edo students strip policeman, set school ablaze, principal flees

News4 hours ago

S’West govs working on arms for Amotekun operatives – Makinde

News4 hours ago

Oil well: Senate threatens arrest, firm sues lawmakers, demands N10bn

News4 hours ago

Ebonyi elders’ council backs Umahi’s presidential bid, says gov detribalised

News4 hours ago

Senate demands maximum sanction for oil firm Bayelsa spill

News4 hours ago

Suit seeking Buhari’s removal, election loser’s inauguration fixed for Feb 8

News4 hours ago

APC headquarters has demanded stay of execution on congresses ruling – Kano

News4 hours ago

NIMC battles high maintenance costs, obsolete computers, poor connectivity

World4 hours ago

Video: Robert Spencer on OAN on our porous border

News17 hours ago

Red List: NANS threatens shutdown of British, Canadian missions, issues 72hrs ultimatum for reversal

News24 hours ago

NDLEA, UN agency launch five-year master plan to check drug abuse

Entertainment22 hours ago

“There is a nasty bug going around. Everyone I know is sick”- Toke Makinwa cries out

Local17 hours ago

‘I’m not for sale’, Buhari’s aide tells airport operators

Politics16 hours ago

Ex-PMAN President, Bolaji Rosiji, is dead

News16 hours ago

Omicron: Student, work visa applications will be processed despite travel restrictions — UK

Politics16 hours ago

Alleged money laundering: Court fixes March 7 for trial-within-trial for ex-minister Adoke, one other

Entertainment16 hours ago

“A well-to do young man has no business praying for a wife, there are things men don’t do” – Nigerian man sparks debate

News16 hours ago

Tonto Dikeh urges Halima Abubakar to name bullies in Nollywood

Entertainment16 hours ago

#JusticeForSylvester: “My son is innocent, he’s not a boarder” – Mother of accused student, Edward Brown speaks

Politics20 hours ago

Students risk losing $17trn in lifetime earnings to COVID-19, says report

Relationship12 hours ago

The Type Of Guy You Deserve, Based On Your Love Language

News12 hours ago

Anambra airport receives first commercial flight, begins operations

Sports17 hours ago

Steven Gerrard Admits He Is Surprised By How Quickly His Players Have Taken On Board His Philosophy

Technology24 hours ago

You Can Now Set Disappearing Message By Default on All Chat

Business News22 hours ago

NGX Index Sheds 0.38% as HNIs, Institutional Investors Dominate Market

Politics16 hours ago

Atiku to deliver Achievers University convocation lecture, as 27 bag first class

Entertainment23 hours ago

Update: Eight children found dead inside parked car in Lagos laid to rest

Entertainment18 hours ago

“What about being a woman is funny?” – Reality star, Isilomo fumes as she reveals she despises Nigerian comedians who dress like women to appear funny

Viral16 hours ago

Man Caught On Camera Doing It With A Woman With Huge Boobs In A Swimming Pool (Video)

Trending