The price of oil is heading to close its second consecutive month of losses, pressured by new mobility restrictions due to the COVID-19 pandemic that continues to hurt demand. This morning's rises in WTI futures (+0.6%) and Brent futures, the benchmark in Europe (+0.5%), are not enough to avoid the accumulated falls of 10% in the case of WTI, and 6.3% in the case of Brent.
WTI futures are trading at around $36 while Brent futures are slightly above $38.
Oil-producing countries are rethinking their increase in production that they had planned as of January due to several events, including:
- The new wave of infections in Europe that is leading to confinement measures and mobility restrictions in countries such as Germany, France, Italy and Spain
- The uncertainty that has arisen in the United States before the elections next Tuesday
The Organization of the Petroleum Exporting Countries (OPEC) and its allies could maintain the current reduction due to the blockades in Europe and the increase in production in Libya. On November 30, this doubt will be cleared up at the meeting that this group plans to hold.
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Source: Admiral Markets MetaTrader 5. WTI Futures CFD Chart. Data range: from February 4, 2020, to October 30, 2020. Prepared on October 30, 2020, at 10:30 a.m. Keep in mind that past returns do not guarantee future returns.
In the last four years, oil has achieved a certain price recovery but, at the moment, it has not been able to reach nor come close to the record prices prior to 2014, when it was between $90 and $100. Now it is struggling to hold around $40.
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