Low Oil Prices After New Wave COVID-19, Closures

Oil prices recorded their lowest level in five months after the new closures caused by the Corona virus. A number of economies have tightened social restrictions, including Britain, France and Germany, which are fighting at the same time the increasing rates of infection. It is feared that the new lock down measures will further affect economic growth, and demand for oil will decline.

The commodity and equity markets are also in a state of tension, as the US presidential election this week approaches. The price of Brent crude, in trading hours in the Asian markets, fell to its lowest level, reaching $ 35.74 a barrel, a level not seen since late May. Brent crude, the main benchmark for oil prices, is down 45 percent from the start of the year.

The virus-induced slowdown has weighed on energy companies, with BP and Shell announcing thousands of job cuts this year. BP plans to cut 10,000 jobs, after a decline in demand, while Royal Dutch Shell said it expects to cut between 7-9,000 jobs.

Election fears:

The price of US crude oil was also hit hard, as it fell by 7 percent on Monday, bringing the price of a barrel to $ 33.64. Fears of an intensely contested presidential election this week, and the absence of sustained US fiscal stimulus, have led to a bleak economic outlook.

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“No matter which way you look at it, next week will be a huge event for the US and global markets,” said Simon Ballard, chief economist at First Abu Dhabi Bank.

“We see the possibility of a sharp rise in volatility around these events, all in the context of deteriorating conditions for COVID-19 in most of the United States, Europe and elsewhere,” he added.

China remains the most optimistic market for economic growth this year.
The world’s largest importer of crude oil said on Monday it would raise its stake for 2021 by 20 percent for companies that are not owned by the state.

This came after activity in the Chinese factory sector accelerated at the fastest pace in nearly a decade in October, as domestic demand increased.

This is what was reported by the media on the PMI, a special survey that focuses on small and medium-sized companies.
Last month, China continued its recovery from the epidemic with strong economic growth during the third quarter, according to official figures.

And China, the second largest economy in the world, reported growth of 4.9 percent between July and September, compared to the same period last year.

Source: Agencies