2020.10.2319:14:00UTC+00Oil Futures Settle Sharply Lower On Demand Concerns

Crude oil prices drifted lower on Friday weighed down by worries about energy demand outlook due to the surge in coronavirus cases in several countries and fresh lockdown measures.

Worries about excess supply in the market due to a surge in oil exports from Libya and data showing another increase in U.S. oil-rig count too impacted oil prices.

West Texas Intermediate Crude oil futures for December ended down by $0.79 or about 1.9% at $39.85 a barrel.

Brent crude futures were down by about $0.75 or 1.8% at $41.71 a barrel.

According to reports, crude output from Libya has exceeded 500,000 barrels per day and it is expected to increase further by the end of this month.

A report from Baker Hughes said U.S. oil-rig count rose for a fifth straight week, surging up by 6 to a total of 211 this week. Meanwhile, active U.S. rig count went up by 5 to 287 in the week ending October 23.

OPEC and its allies are scheduled to increase production by 2 million barrels per day from January. However, it remains to be seen whether the group will go ahead and increase output, considering the likely demand scenario in the wake of a surge in coronavirus cases and fresh lockdown restrictions in several places across the globe.

According to reports, the spread of coronavirus cases in France is getting out of control. Italy is seeing a surge in new cases, and several states across the U.S. have been reporting increases in infections.