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July 2, 2020

Oil prices fall amid demand recovery fears as US Covid-19 cases surge

Oil prices have inched lower after the US recorded its biggest one-day surge in Covid-19 cases adding concerns that the resurgence in cases would stall fuel demand recovery.

By Himaja Ganta

Oil prices have inched lower after the US recorded its biggest one-day surge in Covid-19 cases adding concerns that the resurgence in cases would stall fuel demand recovery.

Brent crude eased $0.06 or 0.1% to touch $41.97 a barrel, while US West Texas Intermediate (WTI) crude futures were down $0.10 or 0.3% to $39.72 per barrel, Reuters reported.

Meanwhile, California reimposed some lockdown measures, banning much of the indoor restaurant dining, closing bars and enforcing strict measures of social distancing as Covid-19 infections surged in the state.

According to a Reuters tally, new Covid-19 cases in the US rose by about 50,000 on 1 July.

This is the biggest one-day surge since the start of the outbreak in the country.

More than half of the new Covid-19 cases each day are reported in the US states of Arizona, California, Florida and Texas.

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Oil prices increased in the earlier session after industry group US Energy Information Administration (EIA) reported a 7.2 million barrels decline in the US crude inventories from a record high last week that ended on 26 June.

AxiCorp strategist Stephen Innes was quoted by the news agency as saying: “Counter-seasonal builds in gasoline inventories as stockpiles unexpectedly rose are not precisely a bullish delight.

“The EIA data showed that gasoline imports hit the highest level since last August and peaked the most on a seasonal basis in nine years.”

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