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Oil Plunges Below $61 as Weak Demand Scope Looms

Oil slipped below $61 per barrel Thursday as concern over the demand scope offset a surprise plunge in U.S. crude inventories and the prospect of further action by OPEC+ to support the market.

In the newest sign of economic weakness that has prompted lower oil demand forecasts, employment in Germany’s private sector dropped for the first time in six years in October, a survey showed Thursday.

Brent crude dropped 26 cents to $60.91 per barrel by 1015 GMT, having risen 2.5% on Wednesday and reached its highest since Sept. 30. U.S. West Texas Intermediate (WTI) crude was down 34 cents at $55.63.

An unexpected plunge in U.S. inventories had supported Crude’s gains on Wednesday.

U.S. crude inventories decreased 1.7 million barrels in the week ended Oct. 18, against analyst expectations of a 2.2 million barrel increase, information from the Energy Information Administration (EIA) confirmed.

Brent prices have surged 13% this year, supported by a supply pact among the Group of the Petroleum Exporting Countries (OPEC) and its allies.

Since January OPEC, Russia and other producers have implemented an agreement to cut oil production by 1.2 million barrels until next March to reinforce the market. The producers meet over Dec. 5-6 to review the policy.

Adding further worth support, officers have stated that extended supply curbs are an option to balance the weaker demand scope for OPEC crude next year.

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Heather Freeman

Heather leads the Crude Oil Column. Her team comprises of four associates, along with them, Heather takes care of the stories written under the column. She has a vast knowledge of oil refiners across the globe, machinery used, current trade developments, the US’ alliance with oil-rich countries, and a lot. Heather is a Finance degree holder from New York University.

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