Oil little changed as tighter supply conflicts with U.S. virus cases

By Laila Kearney NEW YORK (Reuters) - Oil was little changed on Monday as positive economic data supported prices, while a spike in coronavirus cases that could curb fuel demand in the United States limited gains.

Reuters July 07, 2020 00:07:09 IST
Oil little changed as tighter supply conflicts with U.S. virus cases

Oil little changed as tighter supply conflicts with US virus cases

By Laila Kearney

NEW YORK (Reuters) - Oil was little changed on Monday as positive economic data supported prices, while a spike in coronavirus cases that could curb fuel demand in the United States limited gains.

Brent crude was up 36 cents to $43.16 per barrel by 12:10 p.m. EDT (1610 GMT). U.S. West Texas Intermediate (WTI) crude was down 5 cents at $40.60.

"Energy is still correlating more to the coronavirus ," said Bob Yawger, director of energy futures at Mizuho in New York. "The coronavirus situation kills gasoline demand at the end of the day and if you don't need the gasoline, you don't need the crude oil to make it."

In the first five days of July, 16 states reported record increases in new cases of COVID-19 , which has infected nearly 3 million Americans and killed more than 130,000, according to a Reuters tally.

"For now, data for several cities in affected states does not show a significant reduction in road traffic week-on-week," analysts at ING bank said.

Brent found some support as investors expected a string of improving economic data.

U.S. services industry activity rebounded sharply in June, almost returning to its pre- COVID-19 pandemic levels, while China's economy was recovering and its capital markets are attracting money, setting the scene for a healthy bull market, the official China Securities Journal said in an editorial.

German data, however, showed that the recovery from COVID-19 will be slow and painful. Germany's industrial orders rebounded moderately in May and a fifth of firms in Europe's biggest economy said in a survey published on Monday they feared insolvency.

The implied volatility for Brent crude has dropped to its lowest since prices started collapsing in March as markets remain focused on tightening supplies.

Production by the Organization of the Petroleum Exporting Countries (OPEC) has fallen to its lowest in decades.

OPEC and other producers including Russia, collectively known as OPEC+, have agreed to lower output by a record 9.7 million barrels per day (bpd) for a third month in July.

Saudi Arabia's state oil producer Aramco has increased official selling prices (OSPs) for its crude to Asia by $1 a barrel in August, and raised the OSPs for almost all grades to Europe and the United States.

(Additional reporting by Bozorgmehr Sharafedin in London, Florence Tan in Singapore; Editing by Marguerita Choy and Jan Harvey)

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

Updated Date:

TAGS:

also read

Police, protesters clash during May Day rallies in Berlin
World

Police, protesters clash during May Day rallies in Berlin

By Christian Mang BERLIN (Reuters) - At least 5,000 protesters took to the streets on Saturday during May Day rallies in Berlin, clashing with police and injuring three officers, police said. The injuries occurred after some demonstrators threw fireworks, bottles and rocks in protests over social inequality

Somalia's parliament votes to cancel presidential term extension
World

Somalia's parliament votes to cancel presidential term extension

MOGADISHU (Reuters) -Somali lawmakers voted unanimously on Saturday to cancel a two-year presidential term extension they had approved last month, after clashes in the capital Mogadishu between factions of the security forces, which are divided over the issue. In a speech following the vote in the lower house of parliament, Prime Minister Mohamed Hussein Roble ordered the army to return to barracks and urged politicians to avoid inciting violence

N. Korea says Biden policy shows U.S. intent on being hostile, vows response
World

N. Korea says Biden policy shows U.S. intent on being hostile, vows response

(Corrects name to Kwon, not Kim, in paragraphs 6-7) By Josh Smith SEOUL (Reuters) -Recent comments from U.S. President Joe Biden and members of his administration show he is intent on maintaining a hostile policy toward North Korea that will require a corresponding response from Pyongyang, North Korea's Foreign Ministry said on Sunday. The comments came in a series of statements carried on state news agency KCNA, after the White House on Friday said U.S.