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UPDATE 3-Oil falls as virus count mounts, U.S. debate looms

Tue, 29th Sep 2020 05:48

* Global coronavirus deaths surpass 1 million -Reuters tally

* Top traders see tepid oil demand recovery

* Trump-Biden debate in focus

* Japan's August crude imports slump nearly 26%
(Updates prices, adds analysts' comments, Trump-Biden debate,
FT summit remarks, changes dateline to London)

By Bozorgmehr Sharafedin

LONDON, Sept 29 (Reuters) - Oil prices fell on Tuesday as
Europe and the United States grappled with a surge in new
coronavirus infections and investors were cautious ahead of the
first U.S. presidential debate.

Brent's November contract, which expires on
Wednesday, fell 28 cents, or 0.7%, to $42.15 per barrel by 0921
GMT. The more-active Brent crude for December fell 31
cents, or 0.7%, to $42.56 a barrel.

U.S. West Texas Intermediate (WTI) crude dropped 32
cents, or 0.8%, to $40.28 a barrel.

More than one million people have died of COVID-19 worldwide
as of Tuesday, according to a Reuters tally, a bleak milestone
in a pandemic that has devastated the global economy and fuel
demand.

"Rising numbers of new corona cases in the United States and
Europe are limiting the upside potential (for oil prices)," said
Commerzbank analyst Carsten Fritsch.

The heads of the world's largest trading houses predicted
tepid oil demand recovery and flat prices due to the coronavirus
pandemic in coming months and possibly even years.

Meanwhile, all eyes were on the first U.S. presidential
election debate where Democrat Joe Biden and Republican Donald
Trump will square off later on Tuesday (0100 GMT on Wednesday).

Hopes of a new economic stimulus programme in the United
States lent some support to prices as Democratic lawmakers
unveiled a new $2.2 trillion coronavirus relief bill, which
House of Representatives Speaker Nancy Pelosi said was a
compromise measure.

Investors will be looking for signs of growth in U.S. demand
from American Petroleum Institute data on Tuesday and from the
Energy Information Administration on Wednesday.

Five analysts polled by Reuters on average estimate U.S.
crude oil inventories rose by 1.4 million barrels in the week to
Sept. 25. They expect gasoline stockpiles fell by 1.6 million
barrels and distillate inventories, which include diesel and jet
fuel, fell 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
imports of oil in August fell more than 25% from a year earlier.

(Reporting by Bozorgmehr Sharafedin in London, additional
reporting by Sonali Paul in Melbourne and Koustav Samanta in
Singapore
Editing by Susan Fenton)

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