Oil prices have remained unchanged as concerns over fuel demand due to a second wave of coronavirus (Covid-19) infections balanced fall in the US dollar.
Brent crude futures rose $0.06 to $45.23 a barrel, while the US West Texas Intermediate (WTI) crude futures fell by $0.03 reaching $42.16 per barrel, Reuters reported.
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On 5 August, the two benchmarks rose to their highest since early March after data released by the US Energy Information Administration (EIA) highlighted a huge drop in the US crude stocks.
According to EIA data, distillate stocks rose to a 38-year-high in the last week, while the gasoline inventories rose for a straight second week.
However, investors remained cautious about US refined product stocks after central bankers in the country said that the resurgence in Covid-19 infections was ramping down the country’s economic recovery.
The news agency quoted ING Economics as saying: “It is difficult to get overly constructive towards the oil market with demand having stalled and this product overhang.”
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By GlobalDataGasoline demand fell to 8.6 million barrels per day (bpd) last week, as calculated by the EIA.
A weaker US dollar also supported crude prices.
AxiCorp market strategist Stephen Innes said: “Since oil is priced in dollars, that is good for oil.”
The US dollar value against other six overseas currencies fell to a decade low. According to a Reuters poll, a weaker US dollar is expected to continue into next year.
A weaker currency makes dollar-denominated commodities such as oil more affordable to holders of other currencies because the commodities become cheaper.
