Crude oil prices declined sharply on Thursday as a marked surge in the number of coronavirus cases in the U.S. on Wednesday raised fears of another lockdown and triggered concerns about near term energy demand outlook.
West Texas Intermediate Crude oil futures for August ended down $1.28 or about 3.1% at $39.62 a barrel, coming off a four-month high hit in the previous session.
Brent crude futures slid $0.90 or about 2% to $42.39 a barrel.
With Covid-19 cases on the rise in 42 states across the United States, investors fear that re-imposition of lockdown measures will hold back any sustained recovery in fuel demand.
The United States reported more than 60,000 new Covid-19 cases on Wednesday, the biggest increase ever reported by a country in a single day.
The sharp surge in new cases of the virus infection outweighed Wednesday’s data from the Energy Information Administration that showed a sharp 4.8 million barrels drop in U.S. gasoline stockpiles last week.
Also contributing to oil’s weakness was the report that Libya is likely to resume exports after the state oil firm lifted force majeure at its Es Sider oil terminal on Wednesday.
Traders now await a meeting of the Organization of the Petroleum Exporting Countries (OPEC) and its allies, scheduled for July 15, for clues about any extension of production cut agreement.
The material has been provided by InstaForex Company – www.instaforex.com