With some countries re-imposing lockdowns due to renewed rise on coronavirus cases across Europe and the Middle East, prices of oil started to decline once again. The re-imposition of lockdowns signals slower demand for oil and it is already causing a stir in the market.
Brent crude futures went down by 1.4 per cent to $55.21 per barrel this morning at 7:58 GMT after hitting $54.99 as its lowest while the US West Texas Intermediate (WTI) crude fell one per cent to $51.72 a barrel .
Chief global market strategist Stephen Innes commented that the COVID-19 hot spots are heating up again in Asia with some 11 million people in China's Hebei province under lock down. This coupled with the ambiguity surrounding the US Federal Reserve System's policy resulted in some profit making operations according to him.
Edward Maya, senior market analyst at OANDA Company on the other hand attributed the decline in Brent sales due to Saudi Crown Prince Mohammed Bin Salman's statements about Saudi Arabia's future beyond oil and Iraq's decision to raise prices for its crude sales to Asia in the coming month.
The Saudi crown prince just recently unveiled their plans to build a zero-carbon based city in the NEOM megacity which will be the first project to be implemented in the $500 billion business district. The initiative aims to diversify the kingdom's dependence on oil.