According to the statistics from D. Hopkins University, the number of coronavirus cases in the world has already exceeded 27 million amid the virus outbreak in India. Other countries implement the restrictions again in order to stop the COVID-19 spread. As a result, the global market started to suffer again.
Thus, benchmark oil prices collapsed on September 7 amid the announcement that Saudi Aramco would cut prices for all crude for Asian and US buyers in October.
November's futures for Brent crude fell by 1.36% to $42.08 per barrel. At the same time, October's futures for WTI crude lost 1.36% to trade at $39.23 per barrel.
According to Trading Economics, both contracts fell to their lowest level in more than two months. Brent decreased to $41.71 per barrel, WTI collapsed to $38.75 per barrel.
Oil company Saudi Aramco has announced that it intends to cut Arab Light oil prices for Asia by $1.4 per barrel for the second month in a row. Arab Super Light and Arab Extra Light for Asian clients will fall in price by $1.5 per barrel, Arab Heavy decreased by $0.9 per barrel.
The decline in oil prices for American clients in October will range from $0.5 per barrel to $0.7 per barrel.
CBA analysts fear a drop in oil prices, as it indicates a volatile global demand.
Last week, Brent fell at the fastest rate in three months, losing 6.9%. WTI lost 7.5% of its value. Prices are falling amid rising numbers of coronavirus cases in some countries, such as the United States and India. That is why in order to stimulate weak demand, Saudi Arabia cut the prices.
According to Baker Hughes data, the rising number of drilling rigs means that the countries are ready to increase their oil production in the near future despite the oil reserves are still overflowing.
Moreover, the trade relations between the United States and China worsen every day. According to the General Customs Administration of China, the trade turnover between the US and China in January-August 2020 dropped by 3.5% in annual comparison and amounted to $344.3 billion.
The trade imbalance does not correspond to the terms of the trade agreement between the countries concluded in January 2020. At the end of August 2020, the United States and China confirmed their readiness to continue to cooperate with each other and follow the trade and economic agreement. Nevertheless, there is no longer any talk of a complete settlement of the trade dispute between the countries.
The US and China continue to put pressure on each other, imposing various sanctions. Thus, the US authorities intend to impose restrictions on China's leading chipmaker Semiconductor Manufacturing Corp.(SMIC). Moreover, they would like to include SMIC on the blacklist of companies for which US firms require special licenses to supply technologies. There is no doubt that relations between the countries will get worse.
Besides, the US stock indices collapsed. The Dow Jones Industrial Average fell by 0.56% to 28,133.31 points. Standard & Poor's 500 lost 0.81% to 3,426.96 points. The Nasdaq Composite dropped by 1.27% to 11,313.13 points.
Bitcoin also continues to crush. It lost 1.17% to settle at $10,145.0 per bitcoin.
