Oil mixed after dropping on demand concerns post-U.S. holiday

By Sonali Paul
MELBOURNE, Sept 8 (Reuters) - Oil prices were mixed in early
trade on Tuesday on looming demand worries about a possible rise
in COVID-19 cases following the U.S. Labor Day long weekend,
which also marks the end of the peak U.S. driving season.
Coronavirus cases rose in 22 of the 50 U.S. states, a
Reuters analysis showed, on the holiday weekend traditionally
filled with gatherings to mark the end of summer. At the same
time cases are flaring up in India and Britain.
U.S. West Texas Intermediate (WTI) crude CLc1 futures fell
64 cents, or 1.6%, to $39.13 per barrel at 0221 GMT, playing
catch-up with a drop in Brent prices overnight.
Brent crude LCOc1 futures inched up 6 cents, or 0.1%, to
$42.07 a barrel, after falling 1.5% on Monday.
Brent dropped on Monday after Saudi Arabia's Aramco, the
world's top oil exporter, cut the October official selling
prices for its Arab light crude, seen as a sign demand growth
may be stuttering as COVID-19 cases flare up around the world.
"The combination of coming out of summer peak driving season
in the U.S., which is a seasonal factor, has refocused the
market's attention on whether the demand recovery is strong
enough - and clearly there are some doubts, as Aramco's price
move has demonstrated," said Lachlan Shaw, National Australia
Bank's head of commodity research.
Also weighing on the market is the upcoming maintenance
seasons for U.S. refineries, which could cut crude demand by 1.5
million to 2 million barrels per day, he said.
WTI and Brent have dropped out of the ranges they were in
throughout August, with WTI now below $40 after having traded
around $42 for most of the month. Brent has dropped from around
$45. The market had been helped by a weaker U.S. dollar, which
has since rebounded slightly.
"This follows on from worrying signs of a resurgence in
COVID-19 cases in other parts of the world. This has raised
concerns that the recent recovery in demand may be halted as the
general public remains cautious about extended travel," ANZ
Research said.