From the Field
Oil down over persistent demand worries
LONDON, September 8, 2020 – Oil was down on Tuesday morning in Asia, with fuel demand worries persisting as the Labor Day holiday in the US marks the end of the peak driving season.
“The combination of coming out of summer peak driving season in the US, which is a seasonal factor, has refocused the market’s attention on whether the demand recovery is strong enough – and clearly there are some doubts, as Aramco’s price move has demonstrated,” National Australia Bank head of commodity research Lachlan Shaw told Reuters.
The upcoming maintenance seasons for US refineries could also cut crude demand by 1.5 million to 2 million barrels per day, he added.
Brent oil futures were down 0.21% to $41.92 by 12:24 AM ET (5:24 AM GMT), reversing earlier gains. WTI Futures slid 1.99% to $38.98, falling below the $40-mark.
“This follows on from worrying signs of a resurgence in COVID-19 cases in other parts of the world. This has raised concerns that the recent recovery in demand may be halted as the general public remains cautious about extended travel,” ANZ Research said in a note.
India, 22 US states and the UK recently reported an uptick in cases. The total number of global cases topped 27.2 million as of September 8, according to Johns Hopkins University data.
Meanwhile, Saudi Aramco slashed the October official selling prices for its Arab light crude on Monday, indicating the Saudi giant’s doubt over demand growth as COVID-19 continues its worldwide rampage.
Investors now await data on crude oil supply from the American Petroleum Institute (API).