Oil prices on Monday (November 2, 2020) retreated lower by over 4% to hit their lowest levels since May as demand for fuel is seen coming under pressure in the backdrop of coronavirus-led lockdowns across Europe. Further the momentum in the commodity has been affected amid the volatility due to the US Presidential elections.
Brent crude for January was at $36.32 a barrel, down $1.62, or 4.3%, while U.S. West Texas Intermediate (WTI) declined $1.62, or 4.5%, to $34.17 a barrel.
Across the European continent, countries have been re-imposing lockdowns to curb coronavirus infections which have surged in the last one month. "A lot of traders are now looking at the U.S. and their rising infection rates and wondering if Europe is providing the model for what will happen in the U.S. in the coming weeks", said Michael McCarthy, chief market strategist at CMC Markets in Sydney.
Crude has fallen for the second straight month in October, with Brent declining 8.5% and WTI 11%, on rising supplies and weak demand outlook.
As per a Reuters survey, increasing crude output from Iraq and Libya (OPEC members) has been offsetting any production cuts by other members and resulted in the spike in group's output for the fourth month. To support oil prices, OPEC and their allies that includes Russia (a group referred as OPEC+ has been cutting down output by 7.7 million barrels per day. The group is set to hold a policy meet on Nov 30 and December 1.