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Oil prices recover despite increasingly nervous market

Credit: Belga

Oil prices recovered on Tuesday in a “nervous” market attentive to the demand for black gold, which could be seriously affected by possible new confinements.

Around 9:35 AM GMT (11:35 AM in Brussels), a barrel of North Sea Brent for delivery in November was worth $41.99 (€35,76) in London, up 1.33% compared to the close. In New York, WTI’s U.S. barrel for October, for which it is the last day of trading, was up 0.81% to $39.63 (€33,75).

The day before, the two reference prices had lost around 4%.

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The oil market is getting increasingly nervous, noted Commerzbank analyst Barbara Lambrecht. Possible new Covid-19 containment measures in Europe could reduce demand for oil on the continent, according to Avtar Sandu of Phillip Futures.

On 18 March, the pandemic was one of the major factors contributing to the price of gas at the pump hitting an 11 year low.

The measures to curb the pandemic have a direct and significant impact on the demand for oil, Lambrecht said, and are weighing on prices.

The potential drop in demand comes along with issues on the supply side, according to Lambrecht, who cited Libya planning to triple its oil production in the coming days as an example.

The Brussels Times