SINGAPORE (ICIS)--Crude oil futures were trading more than a dollar lower on Monday after having earlier fallen around 6% to their lowest levels since the end of May.
Concerns over global economic growth following the introduction of tighter lockdown measures in Europe and uncertainty ahead of the US Presidential election on Tuesday weighed on crude markets.
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Over the weekend a second national lockdown was announced for England which will come into effect on 5 November.
In France a new national lockdown was introduced on 30 October, with tighter measures also introduced in Spain, Italy and Germany.
The moves come as the continent struggles to overcome a surge in coronavirus infections.
Meanwhile in the US levels of infections reached new record highs recently climbing to to 9.28m cases with 231,000 deaths.
In its latest report, issued prior to the introduction of tighter lockdown measures, the International Energy Agency (IEA) had estimated that global oil demand in 2020 would total 91.7m bbl/day, down 8.4m bbl/day from 2019.
Rising coronavirus infections are expected to slow the recovery in demand which had seen a strong rally in the third quarter of the year after plummeting in in the first half following the introduction of initial round of lockdowns and social distancing measures.
International Energy Agency (IEA) data revealed that global demand rose by some 10.6m bbl/day in 3Q 2020 on levels in the second quarter of the year.
Meanwhile, there are concerns over a marked increase in supply from Libya following the re-opening of oil fields.
The country’s National Oil Corporation (NOC) said over the weekend that production has already hit 800,000 bbl/day, and is targeting 1.3m bbl/day by the beginning of 2021.
Libya is not subject to OPEC+ cuts which are presently removing some 7.7m bbl/day of crude from the market.
OPEC and its allies are set to hold a meeting starting at the end of November where members are expected to discuss whether to introduce a previously agreed reduction of the cut to 5.8m bbl/day from January 2021 or maintain the present cut level amid growing oversupply worries.
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Focus article by James Dennis