Prices for petroleum continued to plummet Wednesday on fears that rising coronavirus cases could lead to further restrictions on activity and curb demand for fuel.
Brent crude dropped 48 cents, or 1.2%, to $40.55 U.S. per barrel. West Texas Intermediate fell 33 cents, or 0.8%, to $38.96.
The benchmarks fell more than 3% on Tuesday as global Covid-19 cases passed one million, having doubled in three months.
Weighing heavily on markets is the continued depressed demand for jet fuel, with air travel in the doldrums due to coronavirus restrictions and a general disinclination to travel.
Refineries have been trying to find ways to blend their product but an oversupply remains and some plants will be forced to shut down. Marathon Petroleum Corp. (NYSE:MPC), the largest oil refiner in the United States, for example, started imposing job cuts on Tuesday.
To counter the fall in demand, the Organization of the Petroleum Exporting Countries is unlikely to increase oil production as planned from January next year, traders said on Tuesday.
The market looked past data from the American Petroleum Institute on Tuesday showing U.S. crude oil stocks fell against expectations, focusing instead on the rise in gasoline inventories.
Adding to investor suspense is the November presidential election, which may remain undetermined on election night, with both candidates contesting the results.
President Donald Trump and Democratic contender Joe Biden ended a chaotic first debate late on Wednesday. Biden, 77, has held a consistent lead over Trump, 74, in national opinion polls, although surveys in the battleground states that will decide the election show a closer contest.
