- WTI futures drop further and approach $37.
- US elections uncertainty and lockdowns hit oil prices.
- US oil rigs’ count increases for the eighth consecutive week – Baker Hughes.
Front-month WTI futures remain trading lower after pulling back from week highs at $39.33 to reach levels right above $37. Market concerns about the impact of coronavirus restrictions and US elections’ uncertainty are pushing prices lower.
Crude prices fall after a three-day recovery
Oil prices have retreated for the second consecutive day weighed by the uncertainty about the outcome of the US Presidential Elections with the candidates on a tight race to win some key states.
Beyond that, the fast spread of the COVID-19 pandemic in Europe with Germany France and England introducing the second wave of lockdowns and the US reaching record levels of infections over the last two days, have boosted concerns about a negative impact on demand.
Furthermore, the weekly Baker Hughes report has failed to provide any relief to oversupply concerns. According to the latest data, US energy producers increased the number of active oil and gas drills for the eight-consecutive week. Oil rigs, a gauge of future supply increased to a total count of 226 in the US on the week of October 30, which is their highest since May.
The positive news comes from the OPEC+. The Organization of Petroleum Exporting Countries and allies like Russia seem to be closer to agree over extending the current output cuts beyond January in order to avoid a further decline on prices.
Technical levels to watch
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