Oil prices dropped on Friday as inventories rose. Oil fell to weekly declines as record-breaking new coronavirus incidents in the United States raised concerns about economic recovery and the speed of fuel demand.
Brent crude was down by 95 cents, or 2.2%, at $41.40 a barrel by 0926 GMT, and WTI oil fell $1.01, or 2.6%, at $38.61 a barrel.
Brent looks set for a weekly decline of almost 3.5% and U.S. crude for a fall of 5%.
More than 60,500 new cases of COVID-19 reported daily in the U.S. on Thursday.
This has been the highest daily number for a country since the pandemic appeared in China last year.
Job losses are increasing, as some states are re-recommending locking restrictions. This situation of America is not good news for the oil demand outlook.
Australia is considering reducing the number of citizens allowed to return from abroad after instructing new restrictions for Melbourne, the country’s second most populous city.
On Friday, the 2020 oil demand forecast has been increased, but warnings remain that the spread of COVID-19 poses a risk to the outlook.
Although the petroleum market has made progress, the pace of the COVID-19 incidents has increased in some countries, which is an uncomfortable indication that the pandemic is not under control.
Prices also fell after the announcement that Libya, which was under a half-year blockade by the eastern forces, removed the force majeure in oil exports, which would lead to excess supply.
Meanwhile, oil stocks are swollen due to the potential drop in demand for gasoline, diesel and other fuels during the first outbreak.
Looking at the bigger picture of the market, what is remarkable is that there is not much drop in the global inventory front yet.
US crude oil inventories rose about 6 million barrels last week after analysts predicted a little less than half of this figure.
The growing tension between the United States and China also put pressure on the prices.