Oil prices are holding their losses on Tuesday after a steep decline for the past two weeks amid fears COVID-19 will lead to further lockdowns.
People staying at home due to the coronavirus has meant less need for cars and gasoline.
The UK has already started accelerating its response to a growth in cases, with Cabinet Office minister Michael Gove on Tuesday encouraging Brits to work from home “if possible” to curb the spread of the virus.
Watch: Michael Gove says people should now work from home if they can
Fears that the US could also experience another major wave of COVID-19 has damped sentiment and weighed heavily on the commodity. Prospects for more fiscal stimulus in the US amid the pandemic and the partisan battle over who will replace the late Supreme Court justice Ruth Bader Ginsburg are adding to concerns.
The anticipated reopening of Libya’s battered oil industry is fuelling further concerns for oil’s uncertain future.
Environmental factors have weighed on prices with Tropical Storm Beta bringing flooding to Texas. The storm is expected to hit Louisiana but interruptions to offshore rigs are generally not expected to last over the long term.
Prices shot up 10% last week after Saudi Arabia said it would defend the market, but the renewed confidence hasn’t shaken the impact of COVID-19 on consumption levels, especially as many nations are doubling down on their lockdown plans.
Watch: Second wave jitters fuel £52bn sell-off for FTSE 100
With the oil outlook weak, the industry is making major investments in renewables to keep pace with consumer demand.
Last week, BP (BP.L) said the relentless growth of oil demand has come to an end, marking the first oil giant to call the end of an era.