Oil prices fell on Friday 3rd July, amid surging new coronavirus infections in the United States, which had market participants worried about the U.S. oil demand recovery trend.
Oil prices were still headed for a weekly gain last week as low supply from OPEC, encouraging economic data from the U.S. and China, and a drop in U.S. commercial inventories had supported prices earlier during the week.
However, the U.S. reported on Thursday its highest level of new daily coronavirus cases so far—at more than 55,000, raising fears that a surge in infections will dent the gradual oil demand recovery in America, which consumers 20 percent of the world’s daily oil supply.
Earlier this week, oil prices rallied after the EIA reported a draw of 7.2 million barrels in crude oil inventories in the United States in the week to June 26, down from an all-time high level of inventories reached the previous week.
A Bloomberg survey of OPEC’s crude oil production in June showed that the cartel’s output fell to a three-decade low of 22.69 million barrels per day (bpd), as Saudi Arabia fulfilled its promise to cut an additional 1 million bpd on top of its quota in the OPEC+ pact.
Apart from tightening supply, oil prices were supported this week by optimistic economic news from the U.S. and China. In the United States, the economy regained 4.8 million jobs last month, data showed on Thursday, which sent equity and oil markets rallying. In China, the manufacturing sector conditions continued to improve in June, the Caixin China General Manufacturing PMI showed, while the Caixin China General Services survey showed on Friday that China’s services sector activity expanded at its fastest pace in a decade and business confidence improved to a three-year high.
Oil prices offered up a mixed market snapshot on Monday, with Brent crude edging higher, supported by tighter supplies, while U.S. benchmark WTI futures was mixed on concern that a spike in coronavirus cases could curb oil demand in the United States.
Brent and the West Texas Intermediate crude oil are both moving higher this morning after a 4.3% gain last week Note previous settlement was on Thursday since the U.S. markets were closed on Friday to mark July 4 holiday celebrations.
Amid rising numbers of coronavirus cases in 39 U.S. states, a Reuters tally showed that in the first four days of July alone, 15 states reported record increases in new COVID-19 infections with parties over the holiday weekend possibly leading to another spike. Oil prices seem to be mixed as coronavirus spike casts shadow over U.S. demand.
Oil Future Closing numbers 3rd July,2020
Brent: $42.8/brl (-0.34)
WTI: $40.24/brl (-0.21)
MGO: $364/mton (+1)
NY Harbor Ulsd: $377.5 (-1,51)
Brent and WTI trading: +0.38 and +0.31 at GMT 06.40
Expect bunker prices little change based on previous closing numbers.