The US dollar weakened, oil fell on Friday. Demand concerns stemming from increased coronavirus cases and escalating US-China tensions continue to put pressure on prices.
The dollar fell to its lowest level in 22 months. The weak dollar often promotes commodity buying because they are cheaper for those who hold other currencies.
Brent crude LCOc1 fell 25 cents to $43.06 a barrel by 0713 GMT, and West Texas Intermediate (WTI) crude CLc1 eased 28 cents to $40.79.
Crude oil prices are trying to stabilize because a new pandemic aid package is expected to be granted in the US. US economic data are signaling that economic recovery is becoming more difficult and much more federal aids are supposed to be offered.
The US economic outlook was once again troubled by the crashes caused by increased coronavirus cases in some states. The unemployment benefit application rose to 1,416 million people last week.
The U.S. announced over 1,000 deaths from COVID-19 on the third day, including Thursday. Globally, more than 15 million people became ill and more than 620,000 people died.
As concerns about the rise in infections and renewed government downlocks could hit oil demand, tensions worsened between the world’s two largest oil consumers, the US and China.
US requested from China to close Chinese consulate in Houston early this week, and then China demanding that the US consulate to be closed in Chengdu city, as a response on Friday.
Relations between Washington and Beijing have deteriorated sharply this year, ranging from trade and technology to coronavirus, China’s land demands in the South China Sea and the pressure over Hong Kong.
Despite the stagnation in fuel demand, the bottlenecks in oil ports on the eastern coast of China have increased costs for shippers and importers.