International oil prices fell on Friday and posted a second consecutive monthly drop, as rising COVID-19 cases in Europe and the United States heightened concerns over the outlook for fuel consumption.
Brent crude dropped 19 cents to settle at $37.46 a barrel, after touching a five-month low of $36.64 in the previous session. The U.S. West Texas Intermediate (WTI) crude fell by 38 cents to settle at $35.79 a barrel, after dipping to its lowest since June on Thursday at $34.92. WTI fell 11% for the month, while Brent dropped 10%.
Leaders in France and Germany have already ordered their countries back into lockdown, as a massive second wave of coronavirus infections threatened to overwhelm Europe before the winter. Recently, the United States also has been facing surging cases of infections, even breaking its single-day record for new infections.
What they are saying
According to Paola Rodriguez-Masiu, Rystad Energy’s senior oil markets analyst, “Many nations with high oil consumption across the world are seeing infection levels that they didn’t have even during the first wave, these infection levels are destined to bite oil demand, as traffic will be curbed to a minimum during the coming lockdowns.”
Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, a group known as OPEC+, had planned to raise output by 2 million barrels per day (bpd) in January.
However, top producers of crude oil, Saudi Arabia and Russia, are favorably disposed to maintaining the group’s current output reduction of about 7.7 million bpd into next year in the face of lockdowns in Europe and rising Libyan oil output.
OPEC+ is scheduled to hold a policy meeting over Nov. 30 and Dec. 1.