Oil prices recover from weekly losses with demand rise

Oil prices recover from weekly losses with demand rise

Analysts said satellite data showing strong pick-ups in traffic in China, Europe and across the United States pointed to a recovery in fuel demand.

There are fears that a spike in Covid-19 infections in southern USA states could stall the demand recovery, especially as some of those states, such as Florida and Texas, are among the biggest gasoline consumers. Crude settled above $40 a barrel Monday for the first time since plunging to negative-$37 on April 20, when the world was awash in unwanted oil.

Brent crude futures rose 22 cents, or 0.5 per cent, to $41.27, but were also heading towards a decline for the week.

Other countries that had been recovering from the effects of the coronavirus pandemic also are now dealing with renewed outbreaks.

Despite recent data showing an increase in crude production from USA shales, the major oil producers' compliance with agreed production cuts supported oil's rise. A resurgence of coronavirus cases held consumption in check.

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'As part of that process, we have been reviewing our price assumptions over a longer horizon. Here, you'll learn about the differences between them, and find out how to start trading oil. As the traders, the strong reduction in the planned oil exports from the European ports of Russian Federation in July compared to June will trigger a battle for each cargo and will lead to further growth of premium prices for Urals to Brent.

A double dip in oil demand and prices will depend on whether state and local governments impose widespread lockdowns or allow businesses to remain open with requirements for face masks and social distancing. It's unclear how much political willpower there is to mandate a second lockdown, which would undoubtedly prompt public outrage, he said. "I think early on, people can extend a little grace, but I'm not sure the population would stand for it now".

However, the company's recent revision of its outlook for oil prices and it decision to write down billions in assets sends a very different message - one of a business that has begun to understand the long-term economic impact the virus will have on demand and commodity prices.

"Overall, it seems that today the market is overly enthusiastic and ignores the risk that is attached to new record COVID-19 cases", Rystad said.

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