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Oil on track of weekly increase, despite pressure from COVID-19 surge

by Bunkerist
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Oil prices fell on Friday, under pressure from fuel demand due to slow recovery in the global economy and the accelerating increase in COVID-19 infections. However, a second weekly increase is on its way, aided by vaccine hopes.

Brent crude oil LCOc1 fell 75 cents, or 1.7%, to $ 42.78 a barrel as of 0314 GMT, after a 0.6% drop on Thursday. West Texas Intermediate (WTI) crude oil futures CLc1 fell 89 cents, or 2.2%, to $ 40.23 a barrel, after falling 0.8% on Thursday.

Both indicators headed for a weekly increase of about 8%.

Crude oil stocks increased by 4.3 million barrels compared to the expected decline of 913,000 barrels last week, while US official data also increased the pressure.

If the spread of the pandemic continues like this, it is inevitable that oil prices will remain under pressure next week. New coronavirus infections in the United States and elsewhere are at record levels and tightening economic restrictions to contain the spread has made the global crisis less likely to end in the short term.

Hopes rose this week, contributing to the rise of both WTI and Brent contracts, after an experimental COVID-19 vaccine developed by Pfizer Inc PFE.N and BioNTech 22UAy.DE announced that it was 90% effective.

However, a statement released Thursday said vaccine development and implementation is unlikely to result in a significant increase in oil demand by 2021. The view that it will take time to benefit from the COVID-19 vaccine causes investors to relax their long positions.

Stricter travel restrictions for dealing with coronavirus cases mean OPEC and its allies may shy away from the practice of easing supply restrictions.

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