Oil inches up after flat week

Oil was up on Friday morning in Asia, but still remains down on the month.

Brent oil futures were up 0.41% to $42.11 by 11:59 AM ET (3:59 AM GMT) and WTI Futures rose 0.47% to $40.50.

Both benchmarks are above the $40-mark again, buoyed by a fall in US crude, gasoline, and distillate inventories reported by the US Energy Information Administration on Thursday. However, any meaningful rise was halted by the resurgent COVID-19 pandemic, especially in Europe, and Libya’s oil industry beginning its return to the market.

In the US, uncertainty over the fate of a COVID-19 stimulus bill played its part in dampening investors’ enthusiasm, as did President Donald Trump’s refusal to commit to a peaceful transition of power should he lose the upcoming election. An unexpected rise in US unemployment claims were also a factor in keeping expectations low.

Another headwind for oil prices comes with Libyan refineries starting to ship oil from refineries that had been blockaded for several months.

“The prospect of the return of Libyan barrels to the market is adding to the bearish sentiment,” RBC Capital Markets said in a note. “However, we think the return of the barrels will be slow and subject to reversal based on the volatile security and political picture.”

The rise of COVID-19 cases in Europe is giving cause for concern, with several major economies introducing stiffer measures to constrain the spread of the virus. However, in Germany, the EU’s powerhouse, the ifo Business Climate Index rose to 93.4 in September as businesses take a more positive stance on their future prospects. Although up from August’s 92.5 figure, the reading was lower that the 93.8 in forecasts prepared by Investing,com.

First published by Investing.com