Oil prices slip as COVID-19 case surge dents fuel demand hopes

By Sonali Paul
MELBOURNE, July 30 (Reuters) - Oil prices dipped on Thursday
as a surge of coronavirus infections around the globe raised
fears a rebound in fuel demand would stutter just as major oil
producers are set to raise output in August.
U.S. West Texas Intermediate (WTI) crude CLc1 futures fell
6 cents, or 0.2%, to $41.21 a barrel at 0130 GMT, while Brent
crude LCOc1 futures lost 7 cents, also 0.2%, to $43.68 a
barrel.
Both benchmark contracts hovered around unchanged levels
after having jumped on Wednesday after the U.S. Energy
Information Administration reported a sharp, unexpected 10.6
million barrel drop in crude stockpiles last week.
However, at the same time U.S. gasoline and distillate
stocks, which include diesel and heating oil, both rose against
expectations for inventories to fall - highlighting the patchy
nature of the recovery in fuel demand. EIA/S
"It wasn't all good news, with signs that demand is still
struggling to grow," ANZ analysts said in a note.
Analysts said the mixed price moves on Thursday were due to
demand concerns with COVID-19 infections increasing and raising
the prospects for lockdowns to be reimposed.
"As long as we're recording new daily cases, the risk for
oil demand is just too strong," said Vivek Dhar, a commodities
analyst at Commonwealth Bank of Australia.
Deaths from COVID-19 topped 150,000 in the United States on
Wednesday, while Brazil, with the world's second-worst outbreak,
set new daily records of confirmed cases and deaths. New
infections in Australia hit a record on Thursday.
"If we see lockdowns or partial lockdowns, transportation
gets hit disproportionately. Transportation accounts for
two-thirds of oil demand," Dhar said.
The potential hit to the demand rebound comes just as the
Organization of the Petroleum Exporting Countries (OPEC) and its
allies, together known as OPEC+, are set to step up output in
August, adding about 1.5 million barrels per day to global
supply.