Oil prices remain unchanged as Covid-19 infections rise

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.

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.”

Gasoline 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.