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Copper Tip Energy Services
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Hazloc Heaters

Oil Extends Losses With Virus Concerns Clouding Demand Outlook

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These translations are done via Google Translate

By Sharon Cho and Rakteem Katakey

(Bloomberg) Oil extended declines toward $40 a barrel as concerns about demand linger with the coronavirus raging across many regions.

Infections flared by a record in Hong Kong, and Los Angeles is on the brink of another stay-at-home order. New cases have accelerated in California, although the pace of deaths slowed in Arizona and Florida. The concerns were reflected in equity markets as well with stocks lower in Europe.

WTI oil futures are trading in a narrow range near $40 a barrel

“Risk-off environment as gauged by falling equity markets is not helping oil today,” said Giovanni Staunovo, a commodities analyst at UBS Group AG. “The stalling oil demand recovery story is also not helping. The virus continues to remain a demand concern until a vaccine is found.”

Oil has been stuck in a tight range this month after rebounding sharply from a plunge below zero in April. There are wide-ranging concerns as the pandemic is accelerating again in parts of the world and threatening demand, while OPEC+ is preparing to ease its record supply cuts starting next month. But, Russia is signaling it’s serious about using any extra supply locally and won’t send it to key refining markets like northwest Europe.

Sky Eye Measurement
Sky Eye Measurement
  • West Texas Intermediate for August delivery lost 0.6% to $40.35 a barrel as of 9:54 a.m London time, after falling 1.5% in the previous two sessions
    • The August contract expires Tuesday. The more-active September futures dropped 26 cents to $40.49
  • Brent for September settlement slid 0.6% to $42.90, after slipping 0.5% on Friday

While Russia’s oil export plan is still not finalized, shipments of Urals crude in August are likely to be broadly in line with this month’s levels, according to people familiar with the matter. That would be consistent with a loading plan for the first five days of August, and comments from Energy Minister Alexander Novak that increased oil production is going to be used internally.

Meanwhile, oil explorers in the U.S. last week extended a record streak of rig retirements that commenced four months ago with a Saudi-Russian price war and the virus-driven demand collapse.

Other oil-market news:
  • At almost any other moment in history, the promise of producers pouring millions of barrels of crude into the global market would have been cause for celebration in the world’s shipping hubs. But Covid-19 means that this is a time like no other.
  • The price of physical oil barrels traded in Asia has slipped after Chinese demand cooled following a record purchasing spree.
  • BP Plc has placed some personnel from its Singapore-based crude oil team on leave after they were mentioned in court documents filed in disputes between banks and other trading houses, said people with knowledge of the company’s move.

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