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Oil Futures Settle Slightly Lower On Demand Worries

Crude oil futures settled lower on Monday, extending recent losses, amid rising concerns about outlook for energy demand after OPEC lowered its oil demand forecast for 2020 and 2021.

An announcement from Libya that it would end its months-long blockade and resume output contributed as well to oil's decline.

However, the downside was just marginal as tropical storm Sally, which looks poised to become a category 2 hurricane, is reportedly disrupting oil production in the Gulf of Mexico.

West Texas Intermediate Crude oil futures for October ended down $0.07 or about 0.2% at $37.26 a barrel.

Brent crude futures declined $0.35 or about 0.9% to $39.48 a barrel.

Citing the likely slow pace of recovery of the Indian economy as well as that of several other Asian countries, OPEC has lowered its oil demand forecast for the year to about 90.2 million barrels per day, down by about 400,000 barrels from its August estimate.

OPEC has also said that demand for oil is likely to be low in the first six months of the coming year as well. "Additionally, risks remain elevated and skewed to the downside, particularly in relation to the development of Covid-19 infection cases and potential vaccines," the group said in the report.

OPEC and its allies are scheduled to meet later this week to discuss compliance with deep cuts in production. It looks highly unlikely that the group will consider cutting outputs any further than the existing levels.

Meanwhile, reports say several U.S. states saw a surge in coronavirus cases over the weekend. U.S. infectious disease expert Dr Anthony Fauci has termed the data "disturbing."

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