Crude oil prices fell on Tuesday amid expectations of increasing supply, while the recent surge in energy costs and rising COVID-19 cases are expected to weigh on demand.
Brent crude futures fell 1.1per cent, to $81.30 a barrel while United States’ West Texas Intermediate (WTI) crude one per cent to settle at $79.99 a barrel.
BizWatch Nigeria notes that oil markets have ended each of the last three weeks lower than the previous one.
However, Brent has only shed a total of four per cent in that time, as the market see-sawed between concerns about insufficient supply and worries that high prices will cool demand just as drillers ramp up activity.
The Organisation of the Petroleum Exporting Countries (OPEC) last week cut its world oil demand forecast for the fourth quarter by 330,000 barrels per day (bpd) from last month’s forecast, as high energy prices hampered an economic recovery from the COVID-19 pandemic.
“The market now seems to be less concerned about the current supply tightness, expecting it to be short-lived,” said Rystad senior markets analyst Louise Dickson.
“Traders are instead refocusing on the return of two bearish factors – the possibility of more oil supply sources and more Covid-19 cases.”
