Oil Heading for Weekly Drop as Virus Demand Concerns Mount

EghtesadOnline: Oil prices edged higher on Friday but were set for a weekly decline due to mounting worries about the impact on fuel demand of a widespread resurgence in coronavirus infections, as well as some concern about the likely return of exports from Libya.

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26 September 2020

Brent crude was up 30 cents at $42.24 a barrel, while US West Texas Intermediate crude rose 23 cents to $40.54, Reuters reported.

Brent is heading for a drop of nearly 2% this week with US crude on track for a decline of around 1%. Both benchmarks are also heading for a monthly decline, which would be the first for Brent in six months.

In the United States, which has the highest death toll from the coronavirus pandemic and is the world’s biggest oil consumer, unemployment claims unexpectedly rose last week suggesting an economic recovery is flailing and pushing down fuel demand.

US fuel demand remains in the doldrums as the pandemic constrains travel. The four-week average of gasoline demand last week was 9% below a year earlier.

In other parts of the world, daily increases of coronavirus infections are hitting records and new restrictions are being put in place that will likely limit travel and fuel demand.