Par barani krishnan
Investing.com – Oil was heading for its biggest two-month week on Friday, but concerns over an explosion of new cases of Covid-19 in the United States have reduced market gains in the past two days.
The New York market, the leading indicator for US crude, and London, the global oil benchmark, both posted more than 8% growth for the week.
But for the day, WTI was down 82 cents, or 2%, to $ 40.30 at 1:46 p.m. ET (6:46 p.m. GMT). Brent, meanwhile, slipped 58 cents, or 1.3%, to $ 42.95.
Excessive exuberance of investors in the face of the progress reported by Pfizer (NYSE 🙂 on its Covid-19 vaccine trials sparked a massive rally in risk assets on Monday, giving Wall Street its biggest one-day gain since June and taking most of this week’s gain.
But as the week progressed, the extremely harsh storage conditions for Pfizer vaccine as well as the logistics of delivery became clearer, reducing these market gains.
On the infection front, cases of Covid-19 in the United States hit another daily record Thursday, with 153,000 reported, making it the 10th day in a row that the number of infections was over 100,000. According to Johns Hopkins University, some 10.6 million Americans have so far contracted the virus, while more than 240,000 have died from complications caused by it.
Michael Osterholm, a senior advisor to President-elect Joe Biden’s coronavirus task force, on Thursday pitched the idea of shutting down U.S. businesses for four to six weeks to control the spread of the pandemic. If implemented, it would be the second nationwide lockdown since the March-May stay-at-home orders that curbed the first wave of the outbreak.
In Europe, too, the situation is difficult, with motorway operator Vinci reporting on Friday that traffic fell 48% in the first full week of November in response to the government’s latest public health measures. These measures in Europe’s second-largest economy are expected to remain in place until at least December 1. England is also in a state of semi-lockdown, while German Chancellor Angela Merkel warned on Friday that her government’s recent restrictions on social gatherings could last into the new year.
Oil continued to fall after a surge earlier in the week as the market assesses the ongoing destruction of demand as coronavirus cases continue to rise in the United States and Europe with the implementation of restrictions additional, ”said Alexander Turro, market strategist for RJO Futures in Chicago. .
Since WTI’s breakthrough to 10-week highs above $ 43 on Wednesday, Turro noted that it had corrected to a range of $ 42.89 to $ 38.31 “as global consumption (anemic ) and declining fuel demand continue to remain in the foreground.
While the sharp declines last week and – reported on Wednesday – helped put a floor below $ 40 WTI, sentiment was weakened again by the worrying demand forecast on Thursday by the International Energy Agency. based in Paris. Recent OPEC rumors of staying the course with production cuts were also offset by weaker demand prospects by the cartel.
Finally, there’s the United States – that indicator of future production – which rose for the eighth consecutive week on Friday, according to a reading from industrial firm Baker Hughes.
As crude production in the United States has fallen from pre-pandemic records of 13.1 million barrels per day in mid-March to 10.5 million bpd now, the growing number of crude Forms of drilling raise fears of increased production at the wrong time as the world moves towards more Covid-19 Borders.
– With reporting provided by Geoffrey Smith