Oil down as Covid-19 surges

Oil was down on Thursday morning in Asia, as COVID-19 numbers across the globe continued upwards and added to fuel demand worries.

Brent oil futures was down 0.56% to $44.09 by 11:58 PM ET (3:58 AM GMT) and WTI futures fell 0.83% to $41.66, both remaining above the $40 mark. The WTI futures contract rolled over to the January contract on Nov 18.

The global coronavirus pandemic is steadily worsening, with the virus now firmly entrenched across Europe and the US. Economically disruptive lockdowns, mostly recently in South Australia state, and public activity restrictions are also on the rise, pulling oil prices down.

The latest COVID-19 data is reducing investor appetite for oil, with global cases now past 56 million, of which 11.5 million are in the U.S., along with over 250,000 deaths, nearly one fifth of total global fatalities, according to Johns Hopkins University.

The positive news about vaccine progress over the last week appears to now be fully absorbed by the markets, with demand worries once again pushing to the fore as countries begin to harden their public health restrictions.

“The spread of Covid-19 infection and fresh restrictions in the United States and other parts of the world hit market sentiment as it would hamper fuel demand … investors are also booking profits from the recent rally before the US Thanksgiving holiday later this month,” Kazuhiko Saito, chief analyst at Fujitomi Co., told  Reuters.

However, not all the news is negative for oil. Wednesday’s crude oil supply data from the U.S. Energy Information Administration showing a 768,000-barrel build for the week to Nov. 13, against the forecast 1.650 million. U.S. distillate stockpiles fell by 5.217 million barrels, higher than the expected 1.457 million.

On Tuesday, the American Petroleum Institute had reported a 4.174-million-barrel crude gain.

“Still, lingering worries over a global supply glut, especially with the Covid-19-hit economies, will likely limit upside of oil prices,” Saito added, also predicting WTI futures to be traded between $40 and $42 until <a href=’https://theenergyyear.com/companies-institutions/opec/’>OPEC+’s full ministerial meeting, to be held on Nov. 30 and Dec. 1.

First published on Investing.com