On Thursday, oil prices slid down on the worry over the possibility of renewed coronavirus-related lockdowns in the US. The concern offset the gain on yesterday after a report on US crude oil stockpiles.
By 02.29 GMT, Brent crude oil futures dropped by 0.2% or 7 cents to USD43.22/barrel after gaining 0.5% on Wednesday. Likewise, US WTI crude futures also slipped by 0.3% or 14 cents to USD40.76/barrel following its 0.7% gain yesterday.
Analyst Lachlan Shaw of National Australia Bank commented that the mixed signals on demand have been boggling the market.
On Wednesday, the US Energy Information Administration data showed that the country’s gasoline inventories slumped by 4.8 million barrels in the week ended July 3 and demand soared to the highest level since March 20, at 8.8 million bpd. The figure was way beyond the estimates of analysts.
However, the gain was dragged down by the hike in coronavirus new cases in several states of the US. Yesterday, the country posted the biggest single-day increase of new infections, by more than 58,000 and cases surging in 42 out of 50 states.
The news raised concerns over the possibility of renewed lockdowns that could harm the recent sustained fuel demand recovery. Gasoline demand slumps in regions where the lockdowns were being renewed in the US. Luckily, as the US East Coast gets new infections under control, the demand was recovering well.
At the moment, the market is also closely monitoring the upcoming meeting of the market monitoring panel of the Organization of the Petroleum Exporting Countries and its non-member producer allies (OPEC+) on July 15.
OPEC+ will ease the current 9.7 million bpd oil output cut starting August and the group has been pressing lagging countries in the pact to improve their compliance.
OPEC sources informed this week that Angola will compensate its lacking compliance level by cutting output more from July to September. On the other hand, Libya is trying to resume exports that have been blockaded since January.
