Oil drops as Covid-19 cases spike dampens demand

Oil was down on Friday morning in Asia on the back of a resurgence of Covid-19 globally. Spikes recorded in 37 states further hindered fuel demand recovery in the US, the world’s largest oil consumer.

Brent oil futures dropped 0.58% to $42.89 by 11:04 PM ET (3:05 AM GMT) and WTI futures also slid 0.59% to $40.41.

During the previous session on Thursday, both indexes rose by over 2% on the back of optimistic US jobs data. Non-farm payrolls surged to 4.8 million in June, compared to the predicted 3 million in analyst forecasts prepared by Investing.com and May’s figure of 2.699 million.

Meanwhile, the number of US cases soared to a record 55,000 cases on July 3, pressuring oil prices.

ANZ Research warned in a note, “The market has become increasingly confident that easing restrictions on travel and business would boost demand for crude oil, but the pandemic’s progress threatens to derail this recovery.”

But investors remain optimistic about demand for the black liquid, with US gasoline demand expected to rise over the July 4 holiday weekend and many families expected to hit the road. But whether this increase in travel will result in a continued surge of Covid-19 cases and possible lockdown measures remains to be seen.

By Investing.com: https://www.investing.com/news/commodities-news/oil-drops-as-covid19-cases-spike-dampens-demand-2219463