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Oil prices slip on demand fears as United States virus cases surge

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Oil prices slip on demand fears as United States virus cases surge


Oil prices dipped on Thursday after the United States recorded its biggest one-day spike in coronavirus cases and California re-imposed some lockdown measures, stoking worries a resurgence in COVID-19 cases will stall a recovery in fuel demand.

United States West Texas Intermediate (WTI) crude futures fell 10 cents, or 0.3 per cent, to $39.72 a barrel at 0148 GMT, trimming a 1.4 per cent rise from Wednesday.

Brent crude futures eased six cents, or 0.1 per cent, to $41.97 a barrel, after rising 1.8 per cent in the previous session.

California sharply rolled back efforts to reopen its economy on Wednesday, banning indoor restaurant dining in much of the state, closing bars and beefing up enforcement of social distancing and other measures as COVID-19 infections surged.

Analysts highlighted worries about the spike in cases in heavily populated United States sun-belt states, which are among the country’s biggest consumers of gasoline.

New United States COVID-19 cases rose by nearly 50,000 on Wednesday, according to a Reuters’ tally, in the biggest one-day spike since the start of the pandemic.

More than half the new cases each day are in Arizona, California, Florida and Texas.

Oil prices rose in the previous session after United States Energy Information Administration data showed United States crude inventories fell 7.2 million barrels from a record high last week, far more than analysts had expected, as refiners ramped up production and imports eased.

However, analysts noted the data also showed gasoline stockpiles rose due to a sharp increase in imports, against expectations for inventories to fall.

“Counter-seasonal builds in gasoline inventories as stockpiles unexpectedly rose are not precisely a bullish delight,’’ AxiCorp strategist, Stephen Innes, said in a note.

“The EIA data showed that gasoline imports hit the highest level since last August and peaked the most on a seasonal basis in nine years.’’

All eyes will be on driving activity in the United States over the upcoming July 4 holiday weekend and how quickly United States producers revive shut-in production, analysts said.

AIB

Edited By: Abdulfatah Babatunde (NAN)

Babatunde Abdulfatah: is a graduate and a professionally trained journalist, with experience in national news reporting/editing and verification at the News Agency of Nigeria. NNN is a Nigerian online news portal that publishes breaking news in Nigeria, and across the world. Our journalists are honest, fair, accurate, thorough and courageous in gathering, reporting and interpreting news in the best interest of the public, because truth is the cornerstone of journalism and they strive diligently to ascertain the truth in every news report. Contact: editor[at]nnn.com.ng

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