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Oil prices have declined due to concerns that a new wave of Covid-19 infections globally will see fuel demand stalling as a result of tighter shutdowns.
US West Texas Intermediate (WTI) crude futures rose by $0.04 to $40.97 per barrel, while Brent crude futures were down by $0.11 at $44.04 a barrel, Reuters reported.
National Australia Bank (NAB) commodity research head Lachlan Shaw was quoted by the news agency as saying: “On the demand side, we had quite encouraging global manufacturing (data) … but there’s still quite a bit of evidence of the oil demand recovery stalling in quite a few markets with a resurgence of Covid-19.”
Cities ranging from Manila, Philippines, to Melbourne, Australia, are implementing tighter lockdown measures against a new wave of Covid-19 infections, further reducing the demand for fuel.
Meanwhile, Norway has stopped cruise ships with more than 100 people on board from disembarking at Norwegian ports in light of the Covid-19 outbreak.
A preliminary Reuters poll ahead of API and US EIA data estimated that US refined product stocks rose last week that ended on 31 July.
Five analysts estimated that the US gasoline inventories increased by 600,000 barrels, while distillate stocks slightly grew by 800,000 barrels last week.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, started to step up output this month, adding about 1.5 million barrels per day (bpd) to global supply.
AxiCorp Global markets strategist chief Stephen Innes said: “I think it is fair to say that most oil market participants expected more downward pressure on oil to start the week with Covid-19 ravaging the landscape and OPEC+ adding more barrels into play.”