Oil Trades Lower On Higher Virus Cases

By Glenn Dyer | More Articles by Glenn Dyer

Brent oil futures fell below $US43 a barrel on in light trading on Friday as a holidaying America saw another record number of COVID-19 cases.

Friday saw US states – North Carolina, South Carolina, Tennessee, Alaska, Missouri, Idaho, and Alabama all registered new daily highs numbers cases of COVID-19, the illness caused by the novel coronavirus.

Reuters reported that Texas hit a new peak for hospitalisations as the daily US tally of cases stood at 53,483 on Friday, below the previous day’s record 55,405.

Saturday the situation worsened with the US seeing another unwanted record – the third day with new daily COVID-19 cases topping 50,000, hitting a new 24-hour high of 57,497.

The COVID-19 pandemic has so far infected 11,124,651 people globally and 2,808,003 in the US as of Saturday.

It had claimed at least 526,003 lives worldwide, 129,476 in America according to Johns Hopkins University’s Center for Systems Science and Engineering.

That has oil traders worrying the resurgence of coronavirus cases will again slow demand for oil, gas and associated products.

Brent crude was down 38 cents, or 0.9%, at $US42.76 a barrel and US West Texas Intermediate (WTI) crude fell 44 cents, or 1.1%, to $US40.21 a barrel.

Both crude benchmarks rose more than 2% on Thursday, buoyed by the strong US June jobs figures (4.8 million positions filled) and a drop in US crude inventories. Brent rose around 4%, WTI was up around 5%.

Helping those recovery hopes, a private survey showed on Friday that China’s services sector grew at the fastest pace in over a decade in June.

The Caixin China services purchasing managers index rose to 58.4 in June from 55.0 in May. The reading was above the 50 mark that separates expansion from contraction, signalling rapid month-on-month expansion.

June’s result was the highest since April 2010, when it stood at 58.5.

Total new business rose at the sharpest rate since August 2010, with service providers forecasting further increases in client demand in the coming months, according to the Caixin/Markit survey.

Meanwhile, iron ore prices ended the week back over $US100 a tonne for 62% Fe fines delivered to northern China. The MB Fastmarkets website reported the price rose 1.18% to $US100.65 a tonne. That was down around 2% over the week.

Glenn Dyer

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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