Oil clung to losses with signs of a shaky U.S. economic rebound and rising global coronavirus cases weighing on the prospect for a demand recovery.
Futures in New York fell as much as 2.2% on Friday and are on track for a 0.3% weekly decline.
Record new virus cases from Germany to Portugal are raising the prospect of new lockdown measures, while the U.S. reported the most daily cases in two months.
Meanwhile, manufacturing production in the U.S. unexpectedly declined in September following reports this week that applications for state unemployment benefits jumped to the highest since August.
“The Covid news just keeps getting worse and worse out there,”said John Kilduff, a partner at Again Capital LLC. At the same time, “these manufacturing numbers go right to the heart of economic activity and energy demand.”
Brights spots in the oil demand outlook this week have done little to change the pandemic-driven malaise that has kept futures in New York stuck around $40 a barrel.
Diesel sales in India surged in the first half of October, while a Chinese mega-refiner has been snapping up crude.
“Today’s decline is no surprise, in the same way that new bearish Covid-19 news isn’t unexpected any more,” said Rystad Energy AS analyst Paola Rodriguez Masiu. “Although we will not likely enter such deep lockdowns like in the pandemic’s first wave, we still see restrictions again, and they do have an effect in every aspect of our lives, including fuel consumption.”
Prices –
West Texas Intermediate for November declined 26 cents to $40.70 a barrel at 10:39 a.m. in New York
Brent for December settlement lost 32 cents to $42.84 a barrel
As prices struggle to break free from the weight of pandemic-driven demand concerns, the pain is also being felt across the U.S. shale industry. Schlumberger, the world’s biggest oil services provider, expects it to take at least another year to rebuild one measure of profit to pre-pandemic levels.
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