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Oil prices are fighting hard to regain some ground after falling sharply on Tuesday, but WTI is still just above $ 38.
Prices fell sharply on Tuesday, falling from about $ 40 a barrel at the close of the day on Monday to $ 36.76 on Tuesday after Saudi Arabia cut its Official Selling Price (OSP) for October to two of its biggest buyers, Asian and American refineries, and later. One of the most promising trials of the Covid-19 vaccine was suspended due to an adverse reaction.
The news is bad for oil demand, which is counting on the lifting of the blockages and the opening of businesses to see a full recovery.
However, oil futures rose early on Wednesday, but a new spike in Covid-19 cases in India, Britain and a handful of other countries, along with disappointing news from the EIA about its projections for demand growth. oil, hampered the rally.
The Energy Information Administration (EIA) on Wednesday once again lowered its forecast for oil demand growth by another 210,000 barrels per day, for a total annual decline of 8.32 million bpd for this year.
The EIA also lowered its forecast for world oil demand growth next year by another 490,000 bpd.
The EIA also expects that US oil production will not fall as much as originally thought this year.
While it is common for the oil market to recede whenever Aramco significantly cuts its OSP, which is a proxy to announce to the world that it sees demand for its oil waning, Tuesday’s big sell-off highlights the precarious nature of even modest oil prices in today’s environment.
As of 1:40 pm EDT, WTI had risen $ 1.41 (+ 3.84%) to $ 38.17 per barrel, while Brent crude had risen $ 1.16 (+ 2.92%) to $ 40.94 per barrel.
By Julianne Geiger for Oil.eu
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