Oil prices have dropped as a resurgence of the Covid-19 cases across the globe weighs on fuel demand recovery hopes.
Brent crude future fell 35 cents, or 0.8%, at $42.79 a barrel, while US West Texas Intermediate (WTI) crude futures were down 35 cents, or 0.9%, to $40.30 per barrel, Reuters reported.
Both Brent and the WTI benchmarks rose more than 2% on 2 July. This week, Brent increased by 4.3% and WTI by 4.7%.
According to a Reuters tally, new Covid-19 cases in the US rose by about 50,000 on 2 July.
DailyFX analyst Dimitri Zabelin was quoted by the news agency as saying: “Crude oil prices are notoriously fickle when it comes to oscillations in global sentiment.”
Industry group US Energy Information Administration (EIA) reported a 7.2 million barrels decline in the US crude inventories and 1.2 million barrels rise in the US gasoline stocks in the last week that ended on 26 June.
ANZ Research said 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.”
“The recovery in gasoline demand will plateau until the U.S. economy improves.”