• Tuesday, Jul 05, 2022
  • Last Update : 04:24 pm

Oil prices slip as surging Covid-19 cases overshadow vaccine hopes

  • Published at 09:39 am November 19th, 2020
The sun sets behind an oil pump outside Saint-Fiacre, near Paris, France September 17, 2019 Reuters

OPEC is due to discuss policy at a full ministerial meeting to be held on November 30 and December 1

US crude futures fell in early trade on Thursday, giving up some of gains from the previous day as surging Covid-19 cases and widening lockdowns raised fears over fuel demand, offsetting further upbeat vaccine news.

US West Texas Intermediate (WTI) crude futures were down 39 cents, or 0.9%, to $41.43 a barrel by 0039 GMT, after gaining nearly 1% on Wednesday. Brent crude was yet to trade, having risen 1.4% on Wednesday.

“The spread of coronavirus infection and fresh restrictions in the United States and other parts of the world hit market sentiment as it would hamper fuel demand,” said Kazuhiko Saito, chief analyst at Fujitomi Co.

“Investors are also booking profits from the recent rally before the US Thanksgiving holiday later this month,” he said.

Also read: High oil prices ahead of Opec+ meeting, vaccine hopes

The US death toll from Covid-19 approached 250,000, as New York Mayor Bill de Blasio announced the country’s largest school district will halt in-person learning in the latest major restriction to curb soaring Covid-19 infections.

Daily coronavirus cases in Tokyo and South Korea hit fresh highs, as pollution-cloaked New Delhi struggled with rising cases and Australia reported a highly contagious virus strain which forced a state-wide lockdown.

Worries about coronavirus-related economic damage took over vaccine optimism stoked by the announcement by Pfizer and BioNTech that they could secure emergency US and European authorization for their Covid-19 vaccine next month after final trial results showed it had a 95% success rate and no serious side effects.

On the upside, the US crude inventories rose 768,000 barrels last week, less than analyst expectations in a Reuters poll for a 1.7 million-barrel rise, government data showed. Distillate stockpiles, which include diesel and heating oil, fell by 5.2 million barrels, far exceeding expectations.

“Still, lingering worries over a global supply glut, especially with the Covid-19-hit economies, will likely limit upside of oil prices,” Fujitomi’s Saito said, predicting WTI to be traded between $40 and $42 a barrel until the OPEC+ meeting later this month.

OPEC+, comprising the Organization of the Petroleum Exporting Countries, Russia and other producers, is due to discuss policy at a full ministerial meeting to be held on November 30 and December 1.

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