Fears of Higher Supply and Low Demand Push Oil Prices Down

Crude oil prices fell on Monday as demand weakened and expectations for more supplies went up. Brent crude futures fell by 0.7% to $81.59 a barrel as of 0151 GMT. West Texas intermediate crude oil fell to $80.21 a barrel.

The oil market has been sliding down for three consecutive weeks amid a strong dollar and the upcoming oil supplies report by the Biden administration. Other energy companies in the U.S showed oil and natural gas rigs with crude oil prices nearing a seven-year high.

ANZ analysts said, “The White House has been debating how to tackle higher inflation, with some officials calling for the strategic reserve to be tapped, or halting U.S exports.” The oil and gas rig count increased to 556 in the first half of November up until the 12th, making it the highest recorded level since April 2020.

In relevant news, the OPEC meeting from last week reduced its oil demand forecast by 330,000 barrels a day for the last quarter due to slowed economic recovery driven by high energy prices and the pandemic. Rosneft, the second largest oil producer after Saudi Aramco issued fresh warnings of the possibility of a “super cycle” which could further increase prices to meet the ever-rising demand.