Oil dips on rise in USA coronavirus cases, set for weekly fall

Oil dips on rise in USA coronavirus cases, set for weekly fall

Oil dips on rise in USA coronavirus cases, set for weekly fall

Oil prices rose about 2% in a volatile session on Thursday, buoyed by signs of a marginal improvement in the USA economy and a tepid rise in fuel demand, but price gains were limited by rising cases of COVID-19 in some US states. However, production for Q4 was 1.48 per cent higher at 0.758 million tonnes as compared to 0.747 million tonnes in Q3 2019-20. Texas - the center of the American oil industry - halted its re-opening as infections jumped and Houston's intensive-care wards reached capacity.

Chinese official recently expressed "strong dissatisfaction" with US sanctions that came in response to a new national security bill on Hong Kong, warning that crossing "red lines" and meddling in what China considers its own internal affairs could put the trade deal at risk, The Wall Street Journal first reported on Friday.

Russian exports of the flagship Urals grade from its three main western ports will plunge by 40% next month, according to loading plans seen by Bloomberg.

Consumption is still a long way off pre-virus levels and many refiners are struggling with low margins. The steep reductions underscore Moscow and the OPEC+ alliance's commitment to eliminate the oil glut that's tightened the wider physical crude market.

Earlier gains, supported by optimism over rising road traffic boosting fuel demand, were erased in early US trading on fears that spiking COVID-19 infections in large gasoline-consuming USA states could stall the demand recovery.

Data showing a bigger than expected increase in US durable goods orders contributed to oil's uptick.

Reuters reports that oil shipments from the US Gulf Coast are only quoted as a premium or discount to West Texas Intermediate, based on crudes produced in Texas, Louisiana, and North Dakota. The U.S. benchmark crude is up around 11% so far this month following an 88% surge in May.

"The recovery in oil demand this week was dealt a blow after in the United States were recorded the most significant leap in the number of infections with coronavirus, suggesting that many States will again have to enter a lockdown mode", writes a senior market analyst at Oanda Edward Moya. Nine of the top 20 gasoline-consuming states are showing an upward trend in infections, Standard Chartered Plc said in a note.

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