Oil heading for weekly drop as coronavirus demand concerns mount

By Noah Browning LONDON (Reuters) - Oil prices fell on Friday and were set for a weekly decline due to mounting worries about the impact on fuel demand of a widespread resurgence in coronavirus infections, as well as some concern about the likely return of exports from Libya. Brent crude was down 32 cents at $41.62 a barrel by 1325 GMT, while U.S.

Reuters September 26, 2020 00:06:13 IST
Oil heading for weekly drop as coronavirus demand concerns mount

Oil heading for weekly drop as coronavirus demand concerns mount

By Noah Browning

LONDON (Reuters) - Oil prices fell on Friday and were set for a weekly decline due to mounting worries about the impact on fuel demand of a widespread resurgence in coronavirus infections, as well as some concern about the likely return of exports from Libya.

Brent crude was down 32 cents at $41.62 a barrel by 1325 GMT, while U.S. West Texas Intermediate (WTI) crude fell 41 cents to $39.90.

Brent is heading for a drop of more than 3% this week with U.S. crude on track for a decline of nearly 3%. Both benchmarks are also heading for a monthly decline, which would be the first for Brent in six months.

"This month has not been kind to the oil market," said Stephen Brennock of oil broker PVM.

"Rising virus infections, renewed lockdowns, slowing economic recovery and stalled U.S. stimulus talks have put the brakes on the fragile revival in fuel demand."

In the United States, which has the highest death toll from the coronavirus pandemic and is the world's biggest oil consumer, unemployment claims unexpectedly rose last week suggesting an economic recovery is flailing and pushing down fuel demand.

U.S. fuel demand remains in the doldrums as the pandemic constrains travel. The four-week average of gasoline demand last week was 9% below a year earlier, government data showed on Wednesday.

In other parts of the world, daily increases of coronavirus infections are hitting records and new restrictions are being put in place that will likely limit travel and fuel demand.

In India, throughput by crude oil refiners in August fell 26.4% from a year ago, the most in four months, as fuel demand ebbed because surging coronavirus cases hindered industrial and transport activity.

In Libya, Shell has provisionally booked a tanker to load a crude cargo at Libya's Zueitina terminal on Oct. 3, potentially the first since January at the recently reopened port.

However, analysts have questioned how quickly the country could ramp up supply.

"Fundamentally, nothing has changed to the supply side of the equation that is weighing on oil prices in the bigger picture," said Jeffrey Halley, senior market analyst at OANDA.

(Reporting by Noah Browning and Aaron Sheldrick; editing by David Evans, Jason Neely and Louise Heavens)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.