Oil Near $44, Heads for Weekly Drop as Demand Concerns Rise

EghtesadOnline: Oil held around $44 a barrel on Friday and was heading for its biggest weekly decline since June, as weak demand figures added to concerns of a slow recovery from the COVID-19 pandemic.

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05 September 2020

A US government report showed domestic gasoline demand fell in the latest week. Middle distillates inventories at Asia’s oil hub Singapore have soared above a nine-year high, official data showed.

Brent crude, the international benchmark, was up 5 cents, or 0.1%, to $44.12, heading for a 2.3% drop this week. US West Texas Intermediate fell 3 cents to $41.34, set for the first weekly drop in five weeks, Reuters reported.

FGE analysts said rising coronavirus cases worldwide and renewed lockdowns would dash hopes of a drawdown in oil inventories for some time. The pressure remains on refiners to keep operating rates low.

Oil has recovered from April, when Brent slumped to a 21-year low below $16 and US crude briefly went into negative territory.

A record supply cut since May by the Organization of the Petroleum Exporting Countries and allies, a grouping known as OPEC+, has supported prices.

OPEC began in August to ease the volume of the cutback, raising output by almost 1 million barrels per day.