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Oil falls on US Covid-19 cases

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Oilfield Technology,

Oil prices have fallen as Covid-19 continues to spread in the US.

Rystad Energy’s daily market comment is provided today by Oil Markets Analyst Louise Dickson:

"The oil priced is declining back towards US$40 and it’s because of a combination of factors.

The US dollar has had a relatively strong streak, gasoline stocks builds are anticipated, and pessimism over the short-term oil demand move the market today.

Positive economic indicators out of Europe and Asia are still holding prices above the 40-dollar market, versus the growing number of Covid-19 cases in the US.

The number of people infected by the virus has increased in 16 US states, but a swell of deaths, should it come, could still be another few weeks out, meaning that if US states are making policy based on the current death toll (which is at a relative record low since the end of March), then by the time the death toll again surges, it will already be too late to re-enact stricter lockdowns.

Over the last few weeks, traders have put more weight on how supply evolves, but from now everyone’s eyes are on demand again and how Coid-19 expands in the US.

August to September in particular can be a defining period, so trader vigilance won’t take summer holidays this year.

Some positivity could come if Covid-19 spread slows down, but the reality is that US developments do move markets and oil prices with them. And positivity is not the word there at the moment."

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Upstream news US upstream news Oil price news Oil & gas news