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Oil dropped to $ 45 due to demand concerns, weekly gains expected

by Bunkerist
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Oil fell to about $ 45 a barrel on Friday amid concerns that the recovery in demand would slow due to a resurgence of coronavirus cases, although the commitment from OPEC’s member Iraq backs to further reduce oil production in August.

The resurgence of infections worries the market and the demand outlook. Cases in the United States appear to have increased in several states, and India reported a record daily increase in infections on Friday.

Brent crude LCOc1 fell 31 cents, or 0.7%, to $44.78 by 0942 GMT. West Texas Intermediate (WTI) crude CLc1 slipped 39 cents, or 0.9%, to $41.56.

Meanwhile, traders are watching talks on the next US coronavirus incentive package. No significant progress was made on Thursday. Hopes are still high for another round of financial incentives. Failure to extend the aid hand could hurt the recovery of the US economy and the fragile oil demand outlook.

Brent and WTI are waiting for the weekly closing for about 4% weekly gains. Prices recovered from lows reached in April, when Brent dropped below $ 16, a 21-year low, partly thanks to a record deal on supply cuts by OPEC and its allies.

Iraq’s state news agency stressed on Friday that Saudi Arabia and Iraq are fully committed to the agreement. Actually, Iraq was late in fulfilling its promise.

Throughout the week, the weak US dollar helped support prices by making the commodity more attractive to buyers with other currencies.

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