Infection rates rising at record levels coupled, with new restrictions now put in the United Kingdom, France and Germany coupled with growing concern among oil traders, on recent reports stating OPEC+ might not sustain its production cut next year.
Crude oil prices fell far below $40/barrel after spending sometime trapped in a narrow range around $40/Barrel particularly in the case of the global benchmark for crude, Brent crude, as it kept melting down like an ice cream exposed under the sun.
Such bearish bias is likely to continue in November particularly as the energy demand/supply rebalancing suffer immensely amid new supplies coming from Libya coupled with reports that Iran oil could find its way back into the supposedly saturated oil market if Joe Biden wins the U.S election scheduled to hold in two days’ time.
Recent price action suggests it will take a herculean task for the West Texas Intermediate contract to finish above $45/barrel this year on strengthening sentiments revealing oil bears are driving the price bandwagon smoothly.
Many energy analysts have also anticipated that the second wave of COVID-19 cases prevailing in emerged markets will further push back the oil demand recovery, amid curbs of social mobility seen at record levels.
Meaning in the near term, concerns about demand in the second wave of COVID-19 remains the major factor controlling oil prices, and most oil traders don’t expect much upside at such market conditions until energy demand is firmly on the track to full recovery.
That said oil traders are focused now on the U.S election, coming on Tuesday, as the likely winner in the United States presidential election would be the major catalyst triggering the direction of crude oil prices this coming week.