Share this article

Oil prices have dropped over concerns that surge in cases of Covid-19 infections could threaten fuel demand recovery.

The Brent crude contract for October fell by $0.02, or 0.05%, to $44.07 a barrel at 05:55 GMT while the September Brent contract, which is to expire on 31 July, in light trading saw a drop of $0.07 to $43.68, reported Reuters.

Meanwhile, the US West Texas Intermediate (WTI) crude futures fell five cents to $41.22 a barrel.

On 29 July, both the benchmarks rose after data provided by the US Energy Information Administration (EIA) reported the biggest decline in crude inventories since last December.

According to EIA data, crude inventories were down by 10.6 million barrels to settle at 526 million barrels in the week that ended on 24 July.

OANDA senior market analyst Jeffrey Halley was quoted by the news agency as saying: “Oil should have done much better after the massive fall in US crude inventories of over ten million barrels, as well as the tailwinds from a generally much weaker US dollar.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData

“It may well be that oil markets are pricing in a higher risk of an economic downturn in the US and places elsewhere due to Covid-19.”

The country is one of the worst affected by the pandemic, reporting the highest number of confirmed Covid-19 infections in the world.

As of 29 July, deaths from the virus have surpassed 150,000 in the US.

On 30 July, Australia recorded daily highs in new infections.

The potential impact on demand comes just as the OPEC+ is set to boost production in August by adding around 1.5 million barrels a day to the global supply.