Oil prices dropped on Tuesday as Europe and the United States grappled with a surge in new coronavirus infections and investors remained cautious ahead of the first US presidential debate.
Brent’s November contract, which expires on Wednesday, fell 63 cents, or 1.5 percent, to $41.80 a barrel by 1342 GMT. The more active Brent crude contract for December fell 67 cents, or 1.6 percent, to $42.20.
The average US crude oil inventory estimate from five analysts polled by Reuters was that US stocks rose by 1.4 million barrels in the week to September 25. They expect gasoline stockpiles to have fallen by 1.6 million barrels and distillate inventories, which include diesel and jet fuel, to have declined by 800,000 barrels.
Clashes between Armenia and Azerbaijan over the Nagorno-Karabakh region have also kept markets on edge. If the conflict escalates, it could affect oil and gas exports from Azerbaijan.
“Disruptions to output and exports do not seem imminent. Nevertheless, the conflict has raised the geopolitical risk temperature,” said oil broker PVM’s Tamas Varga.
In a clear sign of weak demand in Japan, the world’s fourth-biggest crude buyer, official data showed the country’s August oil imports fell more than 25 percent from a year earlier.