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Oil prices dip over bleak demand prospects; Bonny Light gains $0.47

Oil set for third weekly gain on China’s increasing demand, Brent gains 1.3%

Oil Prices declined Thursday as soaring coronavirus infections dimmed outlook, with a growth in OPEC output last month straining prices further, much as optimism of U.S. fiscal stimulus limited losses.

Brent crude futures slipped by 34 cents or 0.80% to $41.96 a barrel at 11:16 West Africa Time, after losing 0.2% overnight.

U.S. West Texas Intermediate crude futures depressed by 37 cents or 0.92% to $39.85, following a 2.4% gain on Wednesday.

Bonny Light, Nigeria’s premium oil grade, strengthened by 47 cents or 1.17% to $40.58 on Wednesday.

But Qua Iboe, another key national grade, shed $1.40 or 3.37% to close trade at $40.18 that same day.

Tamas Varga, analyst at PVM Oil, said “it has become evident that the virus has not been contained.

“Infection rates are going up, the global death toll has surpassed the 1 million mark and the world is becoming a gloomy place once again.”

Read also: Oil prices drop again, as surging virus count stokes demand fears; Bonny Light sheds $1.25

7.2 million people have contracted the virus in the United States while fatalities top 206,000.

Bigger output from the Organisation of the Petroleum Exporting Countries (OPEC) also had negative implications for trade, with supply in September scaling up by 160,000 barrels per day (bpd) from August, a Reuters survey showed.

The increase was driven by more expansive supplies by Iran and Libya, who had been excluded from a crude supply agreement between OPEC and its Russia-led allies, a cartel known as OPEC+.

“Increasing supplies from OPEC+ will be risking the rebalancing effort as the market is still grappling with weak demand,” said ANZ Research.

Prices had some little succour from advancement in deliberations in the U.S. regarding a new stimulus package valued at over $1.5 trillion.

A labour group in Norway said it intended to extend offshore industrial action to four new fields beginning from 4th October after workers in their numbers started a strike at the 470,000 bpd Johan Sverdrup oilfield.

Equinor, Sverdrup operator, stated it might run safe operations at the oilfield, the strige regardless.

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