You are here: Home » International » News » Economy
Business Standard

Oil prices fall on coronavirus surge but on track for weekly gain

U.S. government data also added pressure, as crude inventories rose by 4.3 million barrels last week, compared with an expected fall of 913,000 barrels.

Topics
Oil Prices | Coronavirus

Reuters  |  LONDON 

crude oil prices

By Julia Payne

LONDON (Reuters) - fell on Friday, pressured by fears about a slow recovery in the global and fuel demand due to rising infections, but hopes for a vaccine kept the market on track for a second straight weekly gain.

Brent crude was down 36 cents, or 0.83%, at $43.17 a barrel as of 1143 GMT. U.S. West Texas Intermediate (WTI) crude futures fell 48 cents, or 1.17%, to $40.64 a barrel.

For the week, both were headed for a surge of about 9%.

U.S. government data also added pressure, as crude inventories rose by 4.3 million barrels last week, compared with an expected fall of 913,000 barrels.

"In essence, some of the feel good factor from the Pfizer vaccine has worn off and disappointing EIA figures have created a bit of a downward correction," Harry Tchilinguirian, head of commodity research at BNP Paribas, said.

"However, OPEC+ is prepared to tweak its production and we're still waiting for the trial results of other vaccines that may be easier to distribute since they won't need such cold storage."

New infections in the United States and elsewhere are at record levels and tightening restrictions to contain the spread have dampened the prospect of a near-term end to the global health crisis.

Hopes were high that a resolution to the pandemic is on the horizon - stoking this week's jump in WTI and Brent contracts - after data showed an experimental COVID-19 vaccine being developed by Pfizer Inc and Germany's BioNTech was 90% effective.

The Energy Agency (IEA), however, said on Thursday that global oil demand is unlikely to get a significant boost from any roll-out of COVID-19 vaccines until well into 2021.

"Views that it would take time to see any benefit from a COVID-19 vaccine prompted investors to unwind their long positions," said Kazuhiko Saito, chief analyst at commodities broker Fujitomi Co.

Chart analysis suggests WTI is headed toward $39.50 a barrel, he added.

Analysts say tougher restrictions on mobility to deal with sky-rocketing cases mean the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, may hesitate to implement a planned loosening of output curbs agreed in a deal earlier this year.

Algeria's energy minister said this week that OPEC+ could extend the group's current oil production cuts into 2021 or deepen them further if required.

 

(Reporting by Julia Payne and Yuka Obayashi; Editing by Kenneth Maxwell, Sam Holmes, Tom Hogue and Barbara Lewis)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Fri, November 13 2020. 19:43 IST
RECOMMENDED FOR YOU
.