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Oil prices dip on demand worries as California reimposes restrictions

Published 07/02/2020, 08:44 AM
Updated 07/02/2020, 08:50 AM
© Reuters.
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MELBOURNE, July 2 (Reuters) - Oil prices slipped in early
trade on Thursday after California reimposed some coronavirus
lockdown measures, stoking worries a resurgence in COVID-19
cases will stall a recovery in fuel demand.
U.S. West Texas Intermediate (WTI) crude CLc1 futures fell
13 cents, or 0.3%, to $39.69 a barrel at 0024 GMT, trimming a
1.4% rise from Wednesday.
Brent crude LCOc1 futures fell 15 cents, or 0.3%, to
$41.89 a barrel, after rising 1.8% in the previous session.
California sharply rolled back efforts to reopen its economy
on Wednesday, banning indoor restaurant dining in much of the
state, closing bars and beefing up enforcement of social
distancing and other measures as COVID-19 infections surged.
Oil prices rose in the previous session after U.S. Energy
Information Administration data showed U.S. crude inventories
USOILC=ECI fell 7.2 million barrels from a record high last
week, far more than analysts had expected, as refiners ramped up
production and imports eased.
However, analysts noted the data also showed gasoline
stockpiles rose due to a sharp increase in imports, against
expectations for inventories to fall. "Counter-seasonal builds in gasoline inventories as
stockpiles unexpectedly rose are not precisely a bullish
delight," AxiCorp strategist Stephen Innes said in a note.
"The EIA data showed that gasoline imports hit the highest
level since last August and peaked the most on a seasonal basis
in nine years."
All eyes will be on driving activity in the United States
over the upcoming July 4th holiday weekend and how quickly U.S.
producers revive shut-in production, analysts said.

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