Oil prices slip as rising coronavirus cases stoke demand concerns

OPEC raises 2020 demand forecast over China's recovery

Prices had traded lower earlier in the session after applications for USA state unemployment benefits unexpectedly jumped last week to the highest since August, boding poorly for a sustained recovery in demand.

Brent futures fell 16 cents, or 0.4%, to settle at $43.16 a barrel, while USA crude fell 8 cents, or 0.2%, to settle at $40.96.

Oil markets climbed for a third day despite a resurgence in COVID-19 infections across Europe potentially denting fuel demand.

Later in the session, the API will publish its weekly report on United States crude oil supplies (-3.36M exp.) ahead of Thursday's report from the EIA and Baker Hughes' weekly figures on the United States drilling activity on Friday.

The heads of two of the world's biggest oil producers, Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman, discussed the situation in energy markets during a telephone call, the Kremlin said on Tuesday.

Meanwhile, non-OPEC supply was revised higher slightly to 62.8 million b/d for 2020, a drop of 2.4 million b/d from 2019. Those drawdowns were almost double analysts' expectations in a poll.


The Organization of the Petroleum Exporting Countries (OPEC) also forecast a slower demand recovery on Tuesday.

Oil prices edged down on Wednesday under pressure from growing concerns that a recovery in fuel demand will be stalled by soaring coronavirus cases around the world.

"Crude prices are looking very vulnerable as the coronavirus continues to spread like wildfire across Europe and trending higher in the USA", said Edward Moya, a senior market analyst at OANDA.

The U.S. Energy Information Administration is due to release its weekly data on Thursday, a day later than normal following a public holiday.

OPEC and allies in a group called OPEC+ are due to taper production cuts in January by 2 million barrels per day (bpd), from 7.7 million bpd now. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes.

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