Oil Prices for Sep. 25, 2020: Brent Crude, WTI

Oil fell this week amid growing concerns that another wave of the coronavirus pandemic will spark tighter lockdown measures and further stifle crude demand. New York futures edged lower Friday and fell 2.1% on the week. The number of U.S. coronavirus cases rose above 7 million, according to data from Johns Hopkins University. Meanwhile, a second governor tested positive for Covid-19 as cases surge around the country.

At the same time, the market is contending with returning supply. Oil traders have reported a sharp increase in Iraqi exports for next month, while output from Libya has shown signs of rising this week. “There are concerns about the stalling economic recovery,” said Phil Streible, chief market strategist at Blue Line Futures LLC in Chicago. When the world gets a vaccine, widespread reopenings and a meaningful increase in travel, “that’s when you’re going to start to see demand pick up” and prices rally.

WTI resumed its trek downward this week with pandemic fears lingering

U.S. crude’s gradual climb since May has come to a halt in September, with futures on track to drop about 5.5% this month. Still, Goldman Sachs Group Inc. said oil consumption is currently just above 93 million barrels a day and may rise 1.8 million a day to the end of the year. Yet, any meaningful recovery in consumption has so far been held back by the lingering pandemic.

“We’re going to be range-bound for a while until there’s the perception that the bulk of the Covid impact on demand is behind us,” said Michael Lynch, president of Strategic Energy & Economic Research. Additionally “if the OPEC+ deal starts to fall apart and we get a lot more crude, that would send prices down.”

PRICES
West Texas Intermediate for November delivery edged 6 cents lower to settle at $40.25 a barrel Brent for November dipped 2 cents to end the session at $41.92 a barrel. The contract lost 2.9% this week.

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