Oil rises as economic data overshadows coronavirus worries

By Jessica Resnick-Ault NEW YORK (Reuters) - Oil prices edged higher on Tuesday as the U.S. government forecast higher fuel demand and lower production, overshadowing concerns that a surge in new coronavirus cases will hamper a demand recovery. 'The market is popping because of the higher forecast demand, and jobs data,' said Phil Flynn, senior analyst at Price Futures Group in Chicago

Reuters July 08, 2020 00:07:27 IST
Oil rises as economic data overshadows coronavirus worries

coronavirus worries" src="https://images.firstpost.com/wp-content/uploads/reuters/07-2020/08/2020-07-07T101953Z_1_LYNXMPEG660O5_RTROPTP_2_GLOBAL-OIL.jpg" alt="Oil rises as economic data overshadows coronavirus worries" width="300" height="225" />

By Jessica Resnick-Ault

NEW YORK (Reuters) - Oil prices edged higher on Tuesday as the U.S. government forecast higher fuel demand and lower production, overshadowing concerns that a surge in new coronavirus cases will hamper a demand recovery.

"The market is popping because of the higher forecast demand, and jobs data," said Phil Flynn, senior analyst at Price Futures Group in Chicago.

Brent crude futures rose by 30 cents, or 0.7%, to $43.41, by 12:26 p.m. EST (1726 GMT). Earlier, Brent fell to a session low of $42.46. U.S. West Texas Intermediate (WTI) crude futures rose 27 cents, or 0.6%, to $40.90 a barrel, having fallen as low as $39.90.

The U.S. Energy Information Administration (EIA), forecast that global oil demand would recover through the end of 2021, predicting demand of 101.1 million barrels per day (bpd) by the fourth quarter of next year.

“Global oil demand continues to recover faster than previously estimated," Linda Capuano, EIA administrator, said, noting that global liquid fuels consumption in the second quarter was down an average 16.3 million bpd from a year earlier.

Oil prices also got a boost as equities edged higher after the U.S. Labor Department's Job Openings and Labor Turnover (JOLTS) survey for May showed the largest-ever monthly gain for hirings.

Still, 16 U.S. states have reported record increases in new COVID-19 cases in the first five days of July, according to a Reuters tally.

Florida is reintroducing some limits on economic reopenings. California and Texas also reported high infection rates.

Other parts of the world, such as Australia, have also been hit by a resurgence in new infections.

Saudi Arabia raised its August crude official selling prices on Monday in a sign it sees demand picking up. But some analysts said the move could weigh on already poor margins for refiners.

"While record output cuts from the Saudis and the rest of OPEC+ support the idea of stronger differentials, this again will not be welcome news for refiners, doing little to help their margins, which are already under significant pressure," bank ING said.

The U.S. crude market faces some uncertainties from a court decision on Monday ordering the shutdown of the Dakota Access pipeline, the biggest artery transporting crude oil from North Dakota's Bakken shale basin to the Midwest and Gulf Coast regions, due to environmental concerns.

Market sources in the Bakken said the closure of the 570,000-bpd pipeline, while an environmental impact statement is completed, will likely divert some oil flows to transportation by rail.

(Additional reporting by Sonali Paul, Seng Li Peng and Ahmad Ghaddar; editing by Jason Neely/Louise Heavens/Susan Fenton/David Gregorio)

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

Updated Date:

TAGS:

also read

Apple will enable storage of IDs like drivers licenses on iPhones
Business

Apple will enable storage of IDs like drivers licenses on iPhones

By Stephen Nellis (Reuters) -Apple Inc on Monday said it will offer the ability to store state-issued identification cards digitally on iPhones and that it is working with the U.S. Transportation Security Administration to accept the digital IDs at airports, one of several updates to the software that runs on its devices. It also showed updates to its FaceTime video chat app, adding the ability to schedule calls with multiple attendees and making the software compatible with Android and Windows devices.

Airline bosses call on UK and U.S. to lift trans-Atlantic travel restrictions
Business

Airline bosses call on UK and U.S. to lift trans-Atlantic travel restrictions

LONDON (Reuters) - The bosses of all airlines flying passenger services between Britain and the United States called on Monday for the countries' governments to relax COVID-19 restrictions to reopen travel routes between the two countries. After more than a year of restrictions, the CEOs of American Airlines, IAG unit British Airways, Delta Air Lines, United Airlines and JetBlue Airways Corp said high vaccination rates in both countries meant travel could restart safely. The push for reopening trans-Atlantic routes on Monday comes ahead of meetings between U.S.

EU patience wearing thin with UK on N.Ireland, weighing options
Business

EU patience wearing thin with UK on N.Ireland, weighing options

BRUSSELS (Reuters) - The European Union's patience towards Britain over Brexit arrangements in Northern Ireland is wearing thin and the bloc will consider its options should Britain continue its "confrontational path", an EU official said on Monday.