Oil rises on economic data but spike in U.S. virus cases caps gains

By Laila Kearney NEW YORK (Reuters) - Oil rose slightly 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 47 cents to $43.26 per barrel by 1:52 p.m. EDT (1752 GMT).

Reuters July 07, 2020 00:07:51 IST
Oil rises on economic data but spike in U.S. virus cases caps gains

Oil rises on economic data but spike in US virus cases caps gains

By Laila Kearney

NEW YORK (Reuters) - Oil rose slightly 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 47 cents to $43.26 per barrel by 1:52 p.m. EDT (1752 GMT). U.S. West Texas Intermediate (WTI) crude was up 6 cents at $40.70.

"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.

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 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.

Graphic: World demand and supply for oil - https://fingfx.thomsonreuters.com/gfx/editorcharts/yxmvjlnomvr/eikon.png

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.

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