Oil falls past two-month low on bleak short-term demand outlook
Oil fell to its lowest intraday level since July as signs of faltering demand continue to depress prices.
Futures in London traded below $42 a barrel after dropping 1.5% on Monday. Only four of 10 Asian refiners surveyed by Bloomberg said they would be trying to buy more Saudi Arabian crude after the kingdom cut pricing for October as consumption remained below pre-virus levels. Abu Dhabi National Oil Co joined in the price cuts on Tuesday, the latest response to a sluggish demand backdrop in the world’s biggest oil-consuming region.
A stalling Asian demand recovery, the end of the US summer driving season and more supply from the OPEC+ alliance are adding up to a bleak short-term outlook for oil prices. Brent crude’s three-month timespread is nearing the widest contango — where prompt prices are cheaper than later-dated ones — since late May, an indication that concerns about oversupply are returning.
