Oil holds gains on shrinking USA stockpiles By

Oil holds gains on shrinking USA stockpiles By

Brent crude futures LCOc1 fell 23 cents to settle at $42.93 a barrel, and U.S. West Texas Intermediate (WTI) crude futures dropped 8 cents to settle at $40.88 a barrel.

"The uncertain outlook that could see the drawdown of stocks falter is reflected in the fact that physical prices have weakened and this has brought down the front of the forward curve for Brent crude oil".

The document presented scenarios that included a base case that still showed a deficit in 2021 of 1.9 million barrels per day (bpd) on average, albeit less than the deficit of 2.7 million bpd forecast in the previous month's base case.

"The reality is that we're seeing now a pretty active spread of the pandemic across Europe and it's spreading again in north America and that potentially will weigh on oil demand recovery", said Lachlan Shaw, head of commodity research at the National Bank of Australia.

U.S. crude oil inventories decreased by 3.8 million barrels during the week ending October 9, the U.S. Energy Information Administration reported on Thursday. Those drawdowns were almost double analysts' expectations in a poll.

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OPEC+, a grouping of the Organization of the Petroleum Exporting Countries and allied producers including Russian Federation, fear a prolonged second wave of the pandemic and a jump in Libyan output could push the oil market into surplus next year, according to a confidential document seen by Reuters, a much gloomier outlook than just a month ago.

"Crude prices are looking very vulnerable as the coronavirus continues to spread like wildfire across Europe and trending higher in the USA", said Edward Moya, a senior market analyst at OANDA.

Oil prices slid on Friday, dragged down by concerns that a spike in COVID-19 cases in Europe and the United States is curtailing demand in two of the world's biggest fuel consuming regions, while a stronger USA dollar also added to pressure.

The poll was conducted ahead of reports from the American Petroleum Institute and the Energy Information Administration.

OPEC and allies in a group called OPEC+ are due to taper production cuts in January by 2 million barrels per day (bpd), from 7.7 million bpd now. New cases have hit around 100,000 daily, compared with more than 51,000 in the United States. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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