Oil flat as Covid-19 cases spike again in US

LONDON, July 17, 2020 – Oil prices were essentially flat on Friday morning in Asia, as investors digested news of yet another spike in Covid-19 cases in the US, the ongoing fragility in US-China relations and the move a day earlier by OPEC+ to ease production cuts.

Brent oil futures slid 0.03% to $43.35 by 9:55 PM ET (2:55 AM GMT) and WTI futures also dropped 0.02% to $40.76.

The US hit another all-time record for new cases of Covid-19 with more than 75,000, shattering the previous one-day record of 68,241 set on Friday. Cases are rising in 41 states, while 25 states have recorded a daily increase in Covid-19 fatalities.

The spike in new cases and global lockdowns are also hitting tourism industries. British Airways, the world’s largest operator of Boeing (NYSE:BA) 747 aircraft, just announced that it will be retiring its entire jumbo jet fleet with immediate effect due to the downturn in the travel industry caused by the pandemic.

This has raised concerns among investors that the pandemic is far from over, dampening hopes of economic recovery.

Meanwhile, US China relations are in limbo after US President Donald Trump signed an executive order on Tuesday to end Hong Kong’s preferential trade status. China vowed retaliatory counter sanctions on Wednesday, and the US is reportedly now considering banning visas for members of the Communist Party of China and their family members.

On Wednesday, OPEC+ eased record-high production cuts. OPEC+ had extended production cuts of 9.7 million barrels per day to the end of July and will, starting in August, move to cut production by 7.7 million bpd. This level of production will stay in place until the end of the year.

By Investing.com: https://www.investing.com/news/commodities-news/oil-flat-as-covid19-cases-spike-again-in-us-2231997

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