The price of crude oil shows no significant change and remains stable Monday morning amid the continuous increase in the number of coronavirus cases around the world. In addition, the climatic conditions in the Gulf of Mexico put pressure on oil. Thus, market participants are closely monitoring weather reports and changes in the hurricane situation in the United States of America.
Since yesterday, about 60% of oil production and refining enterprises in some parts of Mexico have temporarily suspended their activities, primarily those that are located inside the US territory. This is due to the two hurricanes (Marko and Laura), approaching the coast from different directions. In order to maintain production capacity and to avoid significant damage that could reach several billion dollars, it was decided to stop active mining and processing of raw materials until the situation stabilizes and weather conditions return to normal.
Nonetheless, data from oilfield services company Baker Hughes on Friday showed that the number of oil-producing units in the US increased by eleven units in the week until August 21, reaching 183 operating units. It is important to note, however, that growth has been recorded for the first time in the last four weeks.
Moreover, investors are also closely monitoring the situation with the spread of coronavirus infection. The authorities of most countries around the globe are still unable to achieve a balance between the introduction of quarantine restrictive measures that can contain the spread of COVID-19, and the opening of most sectors of the economy in order to restore business activity, which will help to overcome the current crisis. Meanwhile, the active fight of the US against coronavirus has finally started to borne fruit: the situation has begun to gradually stabilize. Some countries in Asia and Europe, on the other hand, continue to record new leaps in the infection which cause great concern among market participants, hinting at the next wave of the pandemic.
The price of Brent crude oil futures contracts for October delivery on the London trading floor remained virtually unchanged Monday morning, with only a slight decrease of 0.07% or $ 0.03. This pushed it to the level of $ 44.32 per barrel. Last week's trading ended with a rather significant drop in the price of this brand of oil by 1.2% or $ 0.55.
The price of WTI light crude oil futures contracts for October delivery on the electronic trading floor in New York also slightly dipped by 0.12%, or $ 0.05, which moved it to $ 42.29 per barrel. The brand showed a decline of 1.1% or $ 0.48 during last week's closing.
In general, following the results of the last trading week, Brent black gold became cheaper by 1%, while WTI, on the contrary, added a little by 0.1%.
Investors on the eve of the new school year are seriously concerned that most schools and universities will be forced to continue their work remotely, which means that the demand for fuel will continue to remain low. In addition, business activity is deteriorating in some regions of the world, particularly in Europe, which also indicates a limited demand for crude oil and aviation fuel.
Thus, a situation is unfolding on the global black gold market when the level of oil production is growing (according to the OPEC reduction agreement), and demand is getting lower every day. Most likely, this will ultimately lead to an increase in hydrocarbon reserves, which will again seriously put pressure on traders and the entire raw material market as a whole.
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