Oil prices opened this trading month with a slide. Today, November 2, the price of Brent crude oil fell to $36 per barrel. American WTI crude decreased to $34. The situation is similar to the price collapse in May. Since this summer, prices for "black gold" have dropped by more than 20%.
The slump in oil prices was caused by the second wave of the coronavirus, in particular, by concerns about a recovery in demand. Due to the fast spread of COVID-19, many European countries, such as Austria, the UK, Germany, Spain, Italy, France, Ireland, and others, were forced to reintroduce restrictive measures. By the way, according to the latest data, the number of people infected with the coronavirus in Europe exceeded 10 million.
With many countries reintroducing quarantines, demand for fuel is falling. The upcoming US presidential election is also weighing on the market.
Futures for Brent crude oil dropped by 3.61% to trade at $36.57 per barrel, WTI lost 3.97% to settle at $34.37 per barrel. Both benchmarks decreased by more than 5.8% earlier in the session, hitting lows for the first time since May.
Investors are awaiting actions from OPEC+ as their decision to extend production cuts should support prices. According to OPEC Secretary-General Mohammed Barkindo, by the end of 2020, the group will discuss the terms of the deal in 2021. At the moment, oil production has been reduced by 7.7 million barrels per day. From the beginning of 2021, it is planned to cut production to 5.8 million barrels. However, given the current situation, production growth remains a big question.
