Oil falls on rising COVID-19 cases, supply woes

NEW YORK — Oil edged lower on Friday, falling more than 2% on the week as coronavirus disease (COVID-19) cases surged globally and oil supply is set to rise in coming weeks.

Brent crude futures settled at $41.92 a barrel, down two cents, while US West Texas Intermediate ( WTI) crude futures lost six cents to $40.25 a barrel.

Brent dropped 2.9% for the week and WTI sunk 2.1%

“There is this second wave of fear overhanging the oil market at this point and that’s holding us back,” said Phil Flynn, senior analyst at Price Futures Group in Chicago.

In the world’s top oil consumer the United States, infections are rising in the Midwest, while New York City, which was hit hardest in the spring, is considering renewed shutdown mandates. More than 200,000 people have died of the virus in the nation.

US fuel consumption remains sluggish as the pandemic constrains travel and hampers economic recovery. The four-week average of gasoline demand last week was 9% below a year earlier.

In other parts of the world, daily increases of coronavirus infections are hitting records and new restrictions are being put in place to limit travel.

In India, throughput by crude oil refiners in August fell 26% from a year ago, most in four months, as demand ebbed because the pandemic is hindering industrial and transport activity.

At the same time, more crude oil entering the global market threatens to beef up supply and push prices lower. The US oil and gas rig count rose by six to 261 in the week to Sept. 25, energy services firm Baker Hughes Co. said.

Libya has recently boosted production and Shell has provisionally booked the first crude tanker to load at Libya’s Zueitina terminal since January.

Iranian oil exports, meanwhile, have risen sharply in September in defiance of US sanctions, three assessments based on tanker tracking showed.

Iraq’s oil ministry on Thursday denied a media report citing Oil Minister Ihsan Abdul Jabbar as saying an agreement was imminent with the OPEC+ group to increase Iraq’s crude oil exports.

State news agency Iraq News Agency (INA) had quoted Abdul Jabbar as telling state- owned daily newspaper al-Sabah that he expected to reach an agreement soon with OPEC and its allies — known as OPEC+ — over increasing Iraq’s crude oil exports

The oil minister did not make these comments and did not meet the newspaper’s reporter,” oil ministry spokesman Asim Jihad told Reuters. The INA article has since been deleted. —