Oil Prices Fall Below $45/bbl Due To Demand Concerns But Report Weekly Rise

After facing a negative price point at the advent of COVID, oil prices have recovered considerably but faced a 2% fall on Friday

Highlights:

  • Oil prices fell by nearly 2% on Friday
  • Oil firm Brent Crude LCOcl faced a loss of 1.5% or 69 cents on a barrel, and West Texas Intermediate Crude CLcl reported a reduction in price by 73 cents or 1.7%
  • US President threatens Congress that he will be issuing executive orders to help economic growth if they fail
  • OPEC member state Iraq has pledged to reduce output in August

Oil prices fell by nearly 2% on Friday over the uncertainty of the pandemic’s longevity and a sudden boom is the number of cases spread across the world.

Confirmed cases of the disease are still a dominant issue in the US, with some states reporting overwhelming numbers. In India, they have recorded a massive daily jump in infections. Till now, more than 700,000 people have died from the pandemic.

Oil firm Brent Crude LCOcl faced a loss of 1.5% or 69 cents on a barrel, with the price coming down to $44.40/barrel. Another US firm West Texas Intermediate Crude CLcl reported a reduction in price by 73 cents or 1.7% with their barrels pricing at $41.22/barrel.

With situations regarding their healthcare system and public health worsening, talks between US lawmakers and policymakers on the topic of oil price stimulus have stopped. US President, on the other hand, is pushing the White House to come out with a solution to revive the economy. Else he will be pulling out of discussion and issuing necessary executive orders to help economic growth instead.

OPEC member state Iraq has pledged to reduce output further going into August, giving some respite to prices. They had earlier lagged behind on meeting expectations in April and their pledge on reduction of supply chains.

Crude oil has since recovered, when it fell to $16 an all time low.

Bjornar Tonhaugen of Rystad Energy commented on this, saying, “Traders rushed to the task (of reduction of supply) today to correct gains, remembering the invisible enemy, COVID-19”.

US Energy companies have reduced the number of active oil and natural gas rigs to a record low since July 2005 this week. 

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