London — Oil held at about $44 a barrel on Friday and was heading for its biggest weekly decline since June, as weak demand figures added to concerns of a slow recovery from the Covid-19 pandemic.

A US government report showed domestic petrol demand fell in the latest week. Middle distillates inventories at Asia's oil hub Singapore have soared above a nine-year high, official data showed.

Brent crude, the international benchmark, was up five US cents, or 0.1%, to $44.12 at 7.45am GMT, heading for a 2.3% drop this week. US West Texas Intermediate (WTI) fell 3c to $41.34, set for the first weekly drop in five weeks.

In focus on Friday will be US payrolls figures at 12.30pm GMT, which could be a selling trigger if an expected slowdown in hiring is steeper than forecast. The unemployment rate is expected to fall to 9.8% from 10.2%.

“Demand concerns are firmly front and centre of traders' minds,” said Stephen Brennock of oil broker PVM. “Today’s nonfarm US payroll report will be closely watched and a disappointing number could be the next bearish catalyst.”

FGE analysts said rising coronavirus cases worldwide and renewed lockdowns would dash hopes of a drawdown in oil inventories for some time. The pressure remains on refiners to keep operating rates low, FGE said.

Oil has recovered from April, when Brent slumped to a 21-year low below $16 and US crude briefly went into negative territory. A record supply cut since May by Opec+, has supported prices.

In August, Opec began to ease the volume of the cutback, raising output by almost one-million barrels per day according to a Reuters survey.


Would you like to comment on this article or view other readers' comments?
Register (it’s quick and free) or sign in now.

Speech Bubbles

Please read our Comment Policy before commenting.