By Geoffrey Smith
Investing.com -- Crude oil prices fell again on Monday, albeit without going below the lows of last week, after negative news on the demand outlook weighed on prices.
By 10:45 AM ET (1445 GMT), U.S. crude futures were down 0.6% at $37.12 a barrel, having traded below $37 a barrel overnight, while Brent futures – the global benchmark – were down 0.6% at $39.58 a barrel.
Gasoline RBOB Futures were, by contrast, up 1.3% at $1.1090 a gallon.
Support for crude prices from financial markets is fast drying up: net speculative long positions in crude last week were at their lowest level since April, according to data from the Commodity Futures Trading Commission. Money managers were also net sellers of refined products, according to the data for the week through Sept. 8.
The Organization of Petroleum Exporting Countries said in its monthly oil market report for September that it had cut its forecast for global oil demand this year by another 400,000 to an average 90.2 million barrels a day, as parts of the world economy struggle to recover from the Covid-19 pandemic.
In addition, OPEC said demand will rebound more slowly than it thought next year, warning that “increased usage of teleworking and distance conferencing is estimated to limit transportation fuels from fully recovering to 2019 levels.”
The journey to stability is still long and the road bumpy,” Algerian Energy Minister Abdelmadjid Mattar told Petroleum Argus in an interview. "We need to remain vigilant. Until an efficient treatment or vaccine is made available worldwide, the downside risks to market stability cannot be ignored."
The OPEC report followed on from a longer-term report that was, if anything, even more gloomy for the future of oil. BP’s Energy Outlook, which models a variety of scenarios, indicated that peak demand for oil could come as quickly as the middle of this decade, before going into long-term decline due to environmental policy and changes in consumer preferences.
Most forecasts had pegged ‘peak oil demand’ at no earlier than 2040 before the pandemic, but oil consumption is one of many areas of the economy where the coronavirus has accelerated long-term trends that were already in place.
BP’s base case modeled oil’s share of global energy needs falling to 28% by 2030, from 33% at the start of the current decade.