Oil prices slip as surge in virus cases raises concerns about demand
Oil prices slipped on Thursday as hopes for a vaccine were overshadowed by a surge in new cases of the coronavirus around the world, which raised concerns about the outlook for crude demand.
While early U.S. trading erased some earlier losses, Brent crude was down 19 cents to $44.15 a barrel at 1430 GMT. U.S. West Texas Intermediate crude slipped 29 cents to $41.52 a barrel. The Brent price contango, a market structure in which near-month barrels are cheaper than those in later months, implying current oversupply, was at its shallowest in more than four months. This suggests concerns about a glut are easing.
“Retracements will remain part of the everyday life in coming months as rising infections rates and perceived and actual lockdowns battle with the potential roll-out of COVID vaccines. The underlying optimism, however, persists as vaccine trials are powering ahead,” PVM analysts said. While official U.S. crude inventories rose 768,000 barrels last week, crucially the rise was smaller than the 1.7 million barrels analysts had expected in a Reuters poll.
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