Oil prices edged lower on Friday as concerns increased about the surge in coronavirus cases sapping fuel demand while major crude-producing nations report sharp increases in output. The US reported at least 75,000 new COVID-19 cases on Thursday, a daily record. Spain and Australia reported their steepest daily jumps in more than two months, while cases continued to soar in India and Brazil. Consumption remains below pre-pandemic levels and fuel purchases are falling again as infections rise. Brent crude futures settled at $43.08, and West Texas Intermediate settled at $40.54. Both contracts were little changed from a week earlier.
The resurgence of coronavirus cases in parts of the world is “casting a shadow” over the oil market’s nascent recovery, the International Energy Agency warned last week. “In some countries, the accelerating number of Covid-19 cases is a disturbing reminder that the pandemic is not under control. The risk to our market outlook is almost certainly to the downside.” Oil prices fell on Thursday on an unexpected increase in US stocks, but then rebounded on Friday as Gilead Sciences Inc. said its remdesivir treatment cut Covid-19 mortality risk by 62 percent. The markets closed down a bit on Friday with NY futures at $40.55 and London at $43.24.
Crude hit four-month highs on Thursday, aided by a tightening market and a better-than-expected US jobs report. The caveat is that the jobs survey took place before the latest Covid-19 wave and the associated business closures. Analysts still expect oil to face resistance to any further gains. On Friday, the bearish sentiment came back and halted the rally. West Texas Intermediate crude declined 0.8% to $40.32 a barrel, and Brent crude dipped 0.8% to $42.80 a barrel.