Concern grows over oil demand

OIL PRICES steadied on Friday but were still set for weekly declines as inventories rose and record-breaking new coronavirus cases in the United States stoked concern about the pace of economic recovery and fuel demand.

Brent crude was up by 1 cent, or 0.02 per cent, at $42.36 a barrel and US oil was up 4 cents, or 0.1 per cent, to $39.66 a barrel.

Brent was set for a weekly decline of almost 1 per cent and US crude for a fall of almost 2 per cent.

“Further job losses are on the horizon as several states reimpose lockdown restrictions. America is still in the throes of the pandemic and this spells bad news for the oil demand outlook,” said Stephen Brennock of oil broker PVM.

The International Energy Agency (IEA) bumped up its 2020 oil demand forecast on Friday, but warned that the spread of Covid-19 posed a risk to the outlook.

“While the oil market has undoubtedly made progress ... the large, and in some countries, accelerating number of Covid-19 cases is a disturbing reminder that the pandemic is not under control,” the IEA said.

Prices also dropped after Libya National Oil Corporation announced it had lifted its force majeure on all oil exports after a half-year blockade by eastern forces.