Oil prices struggle to hold five-month high amid pandemic worries

By Sonali Paul
MELBOURNE, Aug 6 (Reuters) - Oil prices were unchanged on
Thursday, struggling to hold onto five-month highs reached in
the previous session, as fuel demand worries caused by a second
wave of coronavirus infections outweighed declines in the U.S.
dollar.
U.S. West Texas Intermediate (WTI) crude CLc1 futures were
down 3 cents, or 0.1%, at $42.16 a barrel at 0148 GMT, while
Brent crude LCOc1 futures rose 6 cents to $45.23.
The two benchmark contracts rose more than 1% on Wednesday
to their highest since March 6, completing a four-day rally,
after the Energy Information Administration reported a much
bigger than expected drop in U.S. crude stockpiles. EIA/S
However, investors remained wary of rising U.S. refined
product inventories at a time when U.S. central bankers said the
resurgence in cases was slowing the economic recovery in the
world's biggest oil consumer.
EIA data showed distillate stockpiles, which include diesel
and heating oil, climbed to a 38-year-high, and gasoline
inventories unexpectedly rose for a second week in a row.
"It is difficult to get overly constructive towards the oil
market with demand having stalled and this product overhang,"
ING Economics said in a note on Thursday.
The U.S. EIA calculated gasoline demand remains around 8.6
million barrels per day, around 10% lower than a year earlier,
just as the U.S. driving season, which ANZ Research called the
"world's biggest seasonal demand period", was winding down.
Still, recent declines in the U.S. dollar have supported
higher oil prices. Since oil futures are priced in dollars,
crude prices tend to rise to offset the weaker currency.
"Since oil is priced in dollars, that is good for oil,"
AxiCorp market strategist Stephen Innes said in a note.
The dollar logged its biggest monthly percentage fall in a
decade against a basket of six currencies .DXY in July and a
Reuters poll found analysts expect it to continue falling into
next year.