Vladimir Zernov
Add to Bookmarks
Crude Oil

Oil Video 29.09.20.


Oil Loses Ground Amid Worries About The Pace Of Oil Demand REcovery

Oil moved below the $40 level as concerns about the future pace of oil demand recovery weighed on prices.  In addition, traders are a bit nervous ahead of the first U.S. presidential debate between Donald Trump and Joe Biden.

Know where WTI Crude Oil is headed? Take advantage now with 

Trading Derivatives carries a high level of risk to your capital and you should only trade with money you can afford to lose. Trading Derivatives may not be suitable for all investors, so please ensure that you fully understand the risks involved, and seek independent advice if necessary. A Product Disclosure Statement (PDS) can be obtained either from this website or on request from our offices and should be considered before entering into a transaction with us. Raw Spread accounts offer spreads from 0.0 pips with a commission charge of USD $3.50 per 100k traded. Standard account offer spreads from 1 pips with no additional commission charges. Spreads on CFD indices start at 0.4 points. The information on this site is not directed at residents in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

Democrats favor policies that could limit demand for oil and boost demand for renewable energy, so a potential Biden victory may serve as a negative catalyst for the oil market.

At the same time, oil simply lacked additional upside catalysts ahead of the release of API Crude Oil Stock Change report. If inventories continued to decline at a healthy pace, oil may reverse its course and quickly get back to the $40 level.

Libya’s Oil Production Returns To The Market

While OPEC+ producers remain constrained by the production cut deal, Libya begins to increase its oil production.

The civil war and the blockade of its ports pushed the country’s oil production to levels below 100,000 barrels per day (bpd).

However, the sides of the Libyan conflict managed to reach a deal which eliminated the blockade, so the country’s ports can export oil to the world market.

As a result, Libya quickly managed to increase its oil production to 250,000 bpd and more oil may soon get to the market if the current deal between the internationally recognized government and General Haftar holds.

This is a big question since previous attempts to reach a deal that would have allowed Libya to increase its oil production failed rather quickly.

Previously, Libya was able to produce 1.2 million bpd so there is plenty of room to increase production. Most likely, some infrastructure was damaged by war so oil traders should not expect a return to full production capacity anytime soon.

However, a continued increase of Libya’s oil production may put some pressure on the market in case demand recovery stalls due to the second wave of coronavirus.

At this point, the second wave remains a key threat to oil price upside. However, most governments have so far managed to avoid lockdowns which bodes well for oil demand recovery.

For a look at all of today’s economic events, check out our economic calendar.

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Trade With A Regulated Broker