Oil prices edge up on increased fuel demand
However, both Brent and WTI are on track for a weekly fall, and a surge of Covid-19 cases in the southern US may mean more lockdowns
London — Oil prices edged up on Friday as the bullish impetus from signs of fuel demand recovery was kept in check by a rising number of new coronavirus cases in the US and China, and tentative expectations of US output ticking up.
Brent crude futures were 38c higher at $41.43 at 8.29am GMT. US. West Texas Intermediate (WTI) crude futures were up 29c at $39.01.
Both contracts are on track for a weekly fall of about 1.7% after record US crude inventory data dragged prices down on Wednesday.
Analysts said satellite data showing a strong pick-up in traffic in China, Europe and across the US pointed to an improvement in fuel demand.
Congestion in Shanghai in the past few weeks was higher than in the same period last year, while in Moscow traffic was back to last year’s levels, data provided to Reuters by location technology company TomTom showed.
However, there are fears a surge in Covid-19 infections in southern US states could stall the demand recovery, especially as some of those states, such as Florida and Texas, are among the biggest petrol consumers.
The global economic outlook has also worsened or, at best, stayed about the same in the past month, a majority of economists polled by Reuters said, and the recession is expected to be deeper than earlier predicted.
“It does appear the market is ignoring supply and demand fundamentals and moving on sentiment,” said Michael McCarthy, chief market strategist at CMC Markets.
The prospect of increased US crude production also kept a lid on gains on Friday.
A survey of executives in the top US oil and gas producing region by the Dallas Federal Reserve Bank found more than half of executives who cut production expect to resume some output by the end of July.