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Oil Retreats as COVID-19 Rages Unabated

CommoditiesJul 07, 2020 12:10AM ET
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© Reuters.

By Bryan Wong

Investing.com- Oil was down on Tuesday morning in Asia, giving up earlier gains as the COVID-19 pandemic shows no signs of ending and dampened investor sentiment globally.

Brent oil futures  dropped 0.37% to $42.94 by 12:02 AM ET (5:02 AM GMT), and WTI futures slid 0.37% to $40.48.

On Monday, Saudi Arabia hiked the price of its oil for the third month in a row, which helped support prices at the beginning of the week and ward off some of the worst concerns associated with the COVID-19 economic recovery.

But the pandemic which has already been rampant for over six months, continues to make headlines across the world. The U.S. remains one of the hardest hit nations, with the death toll surpassing 130,000 as of July 7, according to data from Johns Hopkins University.

“Summer driving demand in the U.S. is low, keeping gasoline demand subdued, and a reintroduction of lockdowns is a major headwind,” ANZ warned in a note.

In Asia, the situation is equally grim. India has reported more than 23,000 new cases of COVID-19. There are also signs that the virus may be mutating, creating an uncertainty that has impacted confidence in economic recovery. This has kept oil prices low despite support from record supply cuts by OPEC+.

“The average age of people getting infected now is a decade and a half younger than it was a few months ago,” Dr. Anthony Fauci, Director of the U.S. National Institutes of Health said at a press conference on July 6.

Investors are now looking to the American Petroleum Institute (API)’s estimate of crude oil supply, due later in the day.

Oil Retreats as COVID-19 Rages Unabated
 

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Comments (2)
Pasajero del toro
Pasajero del toro Jul 08, 2020 4:30AM ET
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Have you considered the exposure of oil workers to the Covid-19 syndrome? Wouldn't that shut down their drilling sites in some cases on top of OPEC cuts? What about transport? Would lorry drivers and ship crews be affected? I think so. It's possible that Covid-19 could make oil prices rise if key workers like this are incapacitated.
Norway trader Trader
Norwaytrader Jul 07, 2020 2:31AM ET
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This is a correction. Covid small impact now, key numbers API today. Hedghes take profit frpm gains before raport, API is bullish today, same at EIA tomorrow because same devolopment in demand, maby bigger since air traffic is riising.
Space Lord
Space Lord Jul 07, 2020 2:31AM ET
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API/EIA bearish/bearish
 
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