Oil prices drop on demand worries as coronavirus cases rise
Gasoline demand will be closely watched as US heads into its July 4 holiday weekend as many Americans are expected to hit the road
SEOUL: Crude prices fell on Friday as the resurgence of the coronavirus globally and in the United States, the world’s largest oil consumer, dimmed the prospects of fuel demand recovery.
Brent crude futures were down 37 cents, or 0.9%, at $42.77 a barrel as of 0042 GMT, and U.S. West Texas Intermediate (WTI) crude futures fell 34 cents, or 0.8%, to $40.31 a barrel.
Both benchmarks rose more than 2% on Thursday, buoyed by stronger-than-expected U.S. jobs data and a fall in U.S. crude inventories. For the week, Brent is up 4.3% and WTI is up 5.6%.
Increases in the daily cases of the coronavirus, however, globally and in the United States pressured prices. New U.S. COVID-19 cases rose by more than 50,000 on Thursday, setting a record for a third consecutive day, according to a Reuters tally.
“The market has become increasingly confident that easing restrictions on travel and business would boost demand for crude oil, but the pandemic’s progress threatens to derail this recovery,” ANZ Research said in a note.
“The recovery in gasoline demand will plateau until the U.S. economy improves,” it said.
Gasoline demand will be closely watched as the United States heads into its July 4 holiday weekend as many Americans are expected to hit the road.
U.S. gasoline stocks rose by 1.2 million barrels in the week to June 26, according to data from the Energy Information Administration released on Wednesday.