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July 10, 2020

Oil prices decline over fuel demand amid rise in US Covid-19 cases

Oil prices have lowered slightly, heading towards weekly declines due to concerns that renewed lockdowns following a spike in Covid-19 cases in the US could suppress fuel demand.

By Himaja Ganta

Oil prices have lowered slightly, heading towards weekly declines due to concerns that renewed lockdowns following a spike in Covid-19 cases in the US could suppress fuel demand.

Brent crude futures were down by $0.25, or 0.6%, at $42.10 a barrel, while US West Texas Intermediate (WTI) crude futures lowered by $0.33, or 0.8%, at $39.29 per barrel, Reuters reported.

The Brent crude benchmark looks like it is set for a weekly decline of 2% while the WTI is set to fall by over 3%.

Many analysts are expecting that fuel demand would be recovered from the virus outbreak. However, record increases in Covid-19 infections in the US raised worries about the recovery.

AxiCorp chief global markets strategist Stephen Innes was quoted by the news agency as saying: “I do not suspect many oil traders will be looking to place significant bids in the market today, suggesting prices may continue to wallow into the weekend.”

Over 60,500 new Covid-19 cases were reported in the US on 9 July.

The tally is considered to be the highest daily count recorded by any country since the emergence of the virus in China last year.

Meanwhile, the Australian Government will consider reducing the number of citizens allowed to return home from overseas, as authorities struggle to limit the spread of the virus outbreak in the country’s second-most populous city Melbourne.

The move to restrict the number of citizens comes after authorities ordered a second lockdown in Melbourne.

Oil stocks also remain ‘bloated’ as a result of the evaporation of fuel demand during the initial outbreak.

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