Tishwash: Oil is settling under $ 40
Oil prices stabilized in early trade on Thursday, and regained some of the lost gains in a 5% drop overnight, amid a possible short-term supply tightening with two-thirds of US production shutting down in the Gulf of Mexico after Hurricane Zeta hit Louisiana.
West Texas Intermediate crude (WTI) rose 10 cents, or 0.28%, to $ 37.50 a barrel by 05:20 GMT, while Brent crude futures rose slightly by six cents to $ 39.70 a barrel.
Oil prices are facing pressures as signs of increased global supplies and a second wave of the Corona virus pandemic caused prices to drop in the previous session, but market observers said that technical support levels were a factor in trading on Thursday.
The impact of Hurricane Zita is expected to be short-lived, and the return of US production will lead to an increase in oil supply, in addition to Libya’s rapid increase in production after eight months of the blockade and the increase in cases of Covid-19 virus in the United States and Europe, which led to new restrictions, all of which are worrying factors for prices.
France will require people to stay home for all activities except for essential activities from Friday, while Germany will close bars, restaurants and theaters from November 2 until the end of the month to stop the spread of the Coronavirus.
Data from the US Energy Information Administration on Wednesday provided evidence of the growing glut as US crude inventories rose by 4.3 million barrels in the week ending October 23, an increase far greater than expected.
The Organization of the Petroleum Exporting Countries and its allies, called the OPEC + community, plan to reduce production cuts in January 2021 from the current 7.7 million barrels per day to about 5.7 million barrels per day link