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Oil prices recorded weekly loss with virus resurrection fears

by Bunkerist
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Oil changed little on Friday and registered a weekly drop for the first time since April, with the increase of new coronavirus cases in US and fears of the second wave of the virus affecting fuel demand.

Brent settled at $38.73 a barrel, up 18 cents, while West Texas Intermediate settled at $36.26 a barrel, down 8 cents.

Both benchmark recorded weekly declines of about 8%.

About half a dozen US states reported a sudden increase in new infections, while fear due to the spread of the coronavirus pandemic brought the fuel rally to a halt.

The market is at a crossroads. If the demand continues to improve, the upward movement in the oil market continues. If we go back to coronavirus retreat, the market unfortunately collapses. Demand is still improving and production continues to fall, and the upward trend of oil prices is still increasing. However, if the coronavirus continues to rise, the risk of dealing with demand recovery is desperate.

At the same time, US crude oil stocks rose to 538.1 million barrels as cheap imports from Saudi Arabia flowed into the country. This happened despite the cuts in supply by US producers, Russia, the Organization of Petroleum Exporting Countries (OPEC) and its allies.

OPEC + reduced approximately 10% of pre-pandemic demand by cutting 9.7 million barrels (bpd) per day and decided to extend it by the end of July last weekend.

The number of U.S. crude oil drilling rigs, an indicator of future supply, fell by seven to 199 this week.

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