On Friday Oil slips as coronavirus cases surge.
Oil prices edged lower on Friday as concerns about the surge in coronavirus cases sapping fuel demand while major crude-producing nations ready increases in output.
The United States reported at least 75,000 new COVID-19 cases on Thursday, a daily record. Spain and Australia reported their steepest daily jumps in more than two months, while cases continued to soar in India and Brazil.
Fuel demand has broadly recovered from a 30% drop in April after nations worldwide restricted movements and businesses shuttered. Consumption remains below pre-pandemic levels, however, and fuel purchases are falling again as infections rise.
Brent crude futures LCOc1 fell 23 cents a barrel to settle at $43.14 per barrel. U.S. West Texas Intermediate (WTI) crude CLc1 fell 16 cents to $40.59. Both contracts were little changed from a week earlier.
Lawmakers in the United States and the European Union are set to debate more stimulus over the coming days.
Benchmark crude fell 1% on Thursday after the Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+, agreed to trim record supply cuts of 9.7 million barrels per day (bpd) by 2 million bpd, starting in August.
U.S. energy firms cut the number of oil and natural gas rigs operating to a record low for an 11th week in a row, according to data from energy services firm Baker Hughes Co.
Firms have slowed reductions as some consider returning to the well pad with crude prices up from historic lows. Energy firms could start adding rigs later this year if prices remain stable at higher levels.
“U.S. rig activity will bottom near 250 rigs or roughly today’s levels,” analysts at Raymond James said. They expect the rig count to average 270 in the second half of 2020.
Today Monday morning, Oil prices continue to ease amid coronavirus cases worldwide.
Oil prices fell on Monday, unnerved by the prospect that a recovery in fuel demand could be derailed by a rise in the pace of coronavirus infections around the world.
More than 14.5 million people have been infected by the novel coronavirus globally and more than 604,000 have died of COVID-19, the disease caused by the pathogen, according to a Reuters tally.
“The risks of a second COVID-19 torpedo to world growth grow increasingly likely by the day,” said Jeffrey Halley, senior market analyst at OANDA.
While fuel demand has recovered from a 30% drop in April after countries around the world imposed strict lockdowns, usage is still below pre-pandemic levels. U.S. retail gasoline demand is falling again as infections rise.
Japan’s oil imports fell 14.7 percent in June from the same month a year earlier, official figures showed on Monday. The drop was not as pronounced as in May when they fell 25%, year on year.
Still, exports from the world’s third-largest economy slumped by a double-digit decline for the fourth month in a row as the coronavirus pandemic took a heavy toll on global demand.
In the U.S., energy drillers cut the number of oil and natural gas rigs operating to a record for an 11th week in a row, data showed on Friday.
Oil Future close 17th July, 2020
Brent crude: $ 43.14 (-0.23) /brl FM delivery Sep
Light crude (WTI): $ 40.59 (-0.16) /brl FM delivery Aug
Gasoil ARA; $ 367.50 (-1.50)/mton FM delivery Aug
NY Harbor Ulsd: $ 375.31 (-2.71)/mton FM delivery Aug
Expect bunker price to edge downward today based Oil Future close on Friday.
Fuel Oil prices down 1-3 usd/mton. MGO down1- 2 usd/mton and NY Harbor Ulsd
down 2-3 usd/mton.
The reason for downward trend is still the Covid-19 situation in the U.S., which is getting worse, but not only in the U.S. The situation world wide is not looking too good, like in India and Brazil.
Oil Futures at GMT 05.54, Brent and WTI are trading downward $-0.26 and $-0.30.