Thursday , October 1 2020
Breaking News
Home / Breaking News / Oil prices slide as virus surge weighs on demand outlook
Oil prices slide as virus surge weighs on demand outlook
Oil pumps in operation at an oilfield near central Los Angeles on February 02, 2011. World oil prices recently rallied close to $100 per barrel, as traders absorbed impressive fourth-quarter US economic growth and fretted over worsening political turmoil in Egypt. Most other commodity markets also won support this week from news that the US economic recovery picked up speed in the last three months of 2010, stoking hopes of strengthening demand for raw materials. The US economy grew at its fastest clip in five years in 2010, the Commerce Department reported, as the country bounced back from recession and fears of a double-dip recession ebbed. AFP PHOTO/Mark RALSTON (Photo credit should read MARK RALSTON/AFP/Getty Images)

Oil prices slide as virus surge weighs on demand outlook

LONDON: Oil prices fell on Thursday, as surging coronavirus infections around the world threatened to jeopardise a recovery in fuel demand just as major oil producers are set to raise output.

The most-active Brent crude contract for October fell 58 cents, or 1.3pc, to $43.51 a barrel at 1224 GMT. The September Brent contract, which is expiring on Friday, fell 57 cents to $43.18 a barrel.

US West Texas Intermediate (WTI) crude futures were down 70 cents, or 1.7pc, at $40.57 a barrel.

Both benchmark contracts rose on Wednesday after the US Energy Information Administration (EIA) reported the largest one-week fall in crude stocks since December.

“The recent resurgence of the coronavirus is an ominous sign that the upside is limited in the immediate future,” Tamas Varga of oil brokerage PVM said.

Deaths from COVID-19 have now topped 150,000 in the United States, while Brazil, with the world’s second-worst outbreak, set daily records of confirmed cases and deaths. New infections in Australia hit a record on Thursday.

The potential hit to the demand rebound comes just as the Organization of the Petroleum Exporting Countries (OPEC) and its allies, together known as OPEC+, are set to step up output in August, adding about 1.5 million barrels per day to global supply.

“The easing OPEC+ supply restrictions combined with the return of some U.S. production may test the resilience of market sentiment in the coming weeks,” Stephen Innes, chief global market strategist at AxiCorp said.

Total and Royal Dutch Shell reported small profits in the second quarter as their oil trading businesses shielded them from the full force of the pandemic-induced demand loss.