Oil extends slump as prospect of second viral wave in U.S. ends rally

Oil prices fell on Friday, extending heavy overnight losses as a surge in U.S. coronavirus cases this week raised the prospect of a second wave of the COVID-19 outbreak hitting demand in the world’s biggest consumer of crude and fuel, Reuters reports. 

West Texas Intermediate CLc1 was down 65 cents, or nearly 2%, at $35.69 a barrel by 0358 GMT, after slumping more than 8% on Thursday. Brent crude LCOc1 was down 58 cents, or 1.5%, at $37.97 a barrel, having dropped nearly 8% the previous session.

A rally that raised oil off April lows has come to a shuddering halt this week as the market faced the reality that the coronavirus pandemic may be far from over, with cases in the United States alone passing 2 million.

The oil benchmarks are heading for their first weekly declines in seven, with Brent dropping about 10% and U.S. crude also down around 10%.

Producers from the United States, as well as from the Organization of the Petroleum Exporting Countries (OPEC) and its allies, a group known as OPEC+, have been cutting supply, some by record amounts.

Still, U.S. crude and gasoline stockpiles grew last week, according to government data. U.S. crude oil inventories rose to a record 538.1 million barrels, as cheap imports from Saudi Arabia flowed into the country.

That gave rise to worries about a continuing supply-demand imbalance, as states including Texas and Arizona are seeing their coronavirus infections jump and are struggling to cope with a growing number of patients filling hospital beds.

News.Az 

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