Brent dives to 6-month low on global demand concerns

Brent crude continued to drop as the US market opened on Monday, resuming its sharp losses after taking a breather on Friday, and fell to a 6-month low, amid global demand concerns due to the ongoing public lockdowns and the second wave of the coronavirus in most parts of Europe, in addition to rising Libyan output.

Brent fell 5.4% to the lowest since May 29 at $35.76, after opening at $37.78, and hit a session-high of $37.78. 

Brent futures rose 0.8%  on Friday, posting the first daily gain in three days.

Oil prices also lost more than 10% during October, in the second straight monthly loss, on renewed concerns about the market balance due to rising output in Libya and Iraq, and a drop in demand due to the coronavirus crisis.

The second wave of the coronavirus has renewed global markets' fears, especially in energy markets, which threatens any demand recovery that happened after the first wave.

The global oil demand crashed 30 million bpd or 30% of the pre-pandemic levels in March, due to the "Great Lockdown" of the global economy. 

The French government announced last week a full lockdown for a month on all activities, except essential services, and the German government ordered to close bars, theaters, and restaurants, from November 2 until the end of the month to curb the coronavirus spread.

While after the UK reported more than 20,000 new cases of coronavirus on a single, the British Prime Minister Boris Johnson announced on Saturday a nationwide lockdown until December 2, and sources said on Sunday that the lockdown is subject to be extended. 

Daily production in Libya jumped to about 500,000 barrels per day, and expectations indicate that production will double by the end of the year, after the receding of the armed military conflict in the country.