WTI Falls Below $39 as COVID fears sweep through

West Texas Intermediate drops to below $39 and steadies with COVID-19 wave fears sweep through.

Global oil prices have fallen sharply as a ceasefire between warring factions in Libya meant that production is now forecast to rise even as governments implement more stringent restrictions to cope with a surge in coronavirus cases.

West Texas Intermediate Crude oil futures for December ended down $1.29 or about 3.2% at $38.56 a barrel, the lowest close since October 2.

With the US elections approaching on the 2rd of November and coronavirus fears resurfacing dramatically, energy and healthcare stocks were among the worst hit.

Despite the recent FDA approval for remdesivir and the prospects of the Johnson Johnson trials, the second wave has impacted the demand-side risk in the energy markets. Cases are also increasing to record numbers in Europe, forcing the countries to revert back to even more social distancing to avoid full-scale lockdowns.

New restrictions have been announced in Spain and Italy to control the surge of infections, which are expected to grow even further in the upcoming winters. In the US several advisors and aides within the Vice President’s inner circle have been tested positive.