Increasing Downside Momentum Targets $37.50

Marco Green
July 11, 2020

Global benchmark Brent crude was trading at $41.75 per barrel at 0633 GMT on Friday for a 1.41% loss after closing Thursday at $42.35 a barrel.

While many analysts are expecting economies and fuel demand to recover from the pandemic, record daily increases in coronavirus infections this week in the United States, the world's biggest oil consumer, raised concerns about the pace of any recovery.

Brent is heading for a weekly decline of more than 1% and USA crude is on track for a fall of almost 3%.

Worldometer, which provides real-time statistics, said Friday that the daily number of COVID-19 cases worldwide spiked by 223,230 on Thursday to break a single-day record. The tally was also the highest daily count yet for any country since the pathogen emerged in China late past year.

"While the oil market has undoubtedly made progress. the large, and in some countries, accelerating number of COVID-19 cases is a disturbing reminder that the pandemic is not under control and the risk to our market outlook is nearly certainly to the downside", the IEA said in its monthly report.

Oil inventories also remain bloated due to the evaporation of demand for gasoline, diesel and other fuels during the initial outbreak.

USA oil fell 33 cents, or 0.8 per cent, at $39.29 a barrel after a drop of three per cent in the previous session.

Market driven cuts had also affected other producers, especially the United States, though USA supply was expected to slowly recover in the second half of 2020 while the lifting of force majeure on exports of Libyan crude could add another 900,000 bpd to global markets by the end of the year. China said on Friday it would impose reciprocal measures in response to USA sanctions on Chinese officials over alleged human rights abuses against the Uighur Muslim minority.

Other reports by Click Lancashire

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