Oil Prices are Dropping Further Away Due to Concerns About Demand. Oil prices fell again on Tuesday, hitting the lowest levels in months.
The oil market is concerned about weaker oil demand, partly due to the resurgence of corona infections in many countries, while sentiment is also weighed down by the sell-off on the stock markets in New York.
The price of a barrel of American oil (of 159 litres) fell 7.3 percent cheaper in London at $ 36.78, and Brent oil fell 5 percent to $ 39.94 a barrel.
Prices are therefore at the lowest levels since the end of June. “Today’s moves show that the market is seriously concerned about the future of oil demand,” an expert told Bloomberg news agency.
Due to the increasing number of corona infections, oil demand from, for example, aviation may come under pressure due to new lockdown measures.
In addition, oil demand from Asia is recovering less strongly from the corona crisis than expected, which prompted Saudi Arabia to cut the price of its crude oil for Asian customers on Monday.
Abu Dhabi will also lower the selling prices of oil to Asia. In addition, large oil producers are united in the OPEC oil cartel and allies such as Russia are working to increase production, which ensures more generous supply.