26.10.202011:29 Forex Analysis & Reviews: Forecast for oil is to decline only

The cost of oil declined today. January futures for Brent North sea crude oil mix were able to lose 1.74%, reaching $ 41.34. At the same time, December futures also fell (by 1.77%), stopping at $ 41.03 per barrel, while December WTI crude futures fell by 1.86% to $ 39.11 a barrel.

The indicated decline is largely due to the very restrained market sentiment, which is a consequence of the rapid spread of the COVID-19 globally. Many countries publish statistics reflecting the record daily number of infected citizens. Over the weekend, WHO announced a new record: more than 465 thousand cases of COVID-19 were recorded per day. With such numbers, it is highly likely that many countries will adopt new quarantine restrictions. However, in this case, the global economic recovery will most likely have to be forgotten for a long time.

The risk of an increase in supply on the market is also important for the quotes and their significant decline. So, Libya announced on Friday that it was ending the operation of the force majeure regime in the oil-loading terminals of Ras Lanuf and Es-Sidra. Thus, they plan to increase oil production up to 1 million barrels per day within 4 weeks. This was supported by American oil and gas service company Baker Hughes, which announced an increase in the number of active oil drilling rigs in the United States by 6 units to 211 units.