LONDON (Reuters) – Oil prices mixed on Monday, with Brent crude rising, backed by tighter supplies and positive economic data, while US benchmark WTI futures fell on concerns that a Increase in coronavirus cases could curb demand for fuel in the United States.
FILE PHOTO: The sun sets behind a crude oil pump jack on a drilling rig in the Permian Basin in Loving County, Texas, USA, November 24, 2019. REUTERS / Angus Mordant
Brent LCOc1 crude rose 41 cents, or 1%, to $ 43.21 per barrel at 1042 GMT. US West Texas Intermediate (WTI) CLc1 crude fell 5 cents, or 0.1%, to $ 40.60.
“We believe that oil market participants are focusing on current demand trends, but continue to ignore the long-term implications of the crown pandemic,” said Commerzbank analyst Eugen Weinberg.
In the first four days of July alone, 15 US states have reported record increases in new cases of COVID-19, which has infected nearly 3 million Americans and killed about 130,000, according to a Reuters count.
“For now, data from several cities in the affected states do not show a significant reduction in road traffic from week to week,” ING bank analysts said.
Brent found some support as investors expected a series of improvements in the economic data.
In China, the economy is recovering while its capital markets are attracting money, setting the stage for a healthy bull market, the official China Securities Journal said in an editorial on Monday.
Traders were also watching for US non-manufacturing activity and retail sales for the eurozone, which expire on Monday and are expected to be positive.
However, German data showed that the recovery of COVID-19 will be slow and painful. German industrial orders picked up moderately in May, and a fifth of companies in Europe’s largest economy said in a poll published Monday that they feared insolvency. (Graph: world oil demand and supply, here)
The implied volatility of Brent LCOATMIV crude has fallen to its lowest level since prices began to collapse in March, as markets remain focused on adjusting supplies as output from the Organization of the Petroleum Exporting Countries (OPEC) it fell to its lowest level in decades.
OPEC and other producers, including Russia, collectively known as OPEC +, agreed to cut production by a record 9.7 million barrels per day (bpd) for the third month in July.
Saudi Arabia’s state-owned oil producer Aramco raised official sale prices (OSP) of its crude to Asia by $ 1 a barrel in August, and increased OSPs from almost all grades to Europe and the United States.
US production, the largest in the world, is also falling. The number of oil and natural gas platforms in operation in the United States decreased for the ninth week, although the reductions have slowed as higher oil prices lead some producers to start drilling again.
(Graph: The main producers in the world cut production, here)
Report by Bozorgmehr Sharafedin in London; additional reports from Florence Tan in Singapore; editing by Jane Merriman and Louise Heavens
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