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Oil prices are unstable, with an increase in the number of coronavirus cases and a drop in US demand

by Bunkerist
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Oil prices presented a mixed market outlook on Monday, Brent crude oil was supported by limited supplies, US WTI futures fell worried that the sudden increase in coronavirus cases could reduce oil demand in the US.

Brent crude LCOc1 rose 18 cents, or 0.4%, to $42.98 a barrel by 0252 GMT after a 4.3% gain last week, while West Texas Intermediate crude CLc1 was at $40.42, down 23 cents, or 0.6%, from its previous settlement on Thursday. U.S. markets were closed on Friday to mark July 4 holiday celebrations.

Amid of an increasing number of coronavirus cases in 39 states of the United States, 15 states announced new COVID-19 infections only in the first four days of July, and another increase is likely to happen after the weekend covering the 4th of July celebrations.

If people stay at home again and crashes begin, the pace of demand recovery in the USA may never be as steep as expected.

Analysts say there is currently no significant reduction in road traffic in the states affected by the new infection.

Allies, including Russia, known as OPEC and OPEC +, pledged to cut production of 9.7 million barrels (bpd) per day for a third month in July. After July, cuts will decrease by 7.7 million basis points by December.

U.S. production, the largest in the world, is also falling. The number of US oil and gas drilling facilities fell to its all-time low during the ninth week. However, there are manufacturers that are starting to drill again due to rising oil prices, so the decline in supply has slowed.

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