Oil Heading For a Weekly Decline on Growing Concerns

Oil prices have retreated, and are heading towards a weekly decline due to growing concerns that fuel demand will be affected by a new large-scale rise in cases of coronavirus, as well as some concern about a possible return of exports from Libya.

Brent crude fell four cents to $ 41.90 a barrel before the European markets opened, while US West Texas Intermediate crude fell eight cents to $ 40.23 a barrel.

Brent is heading towards a decline of about 3% this week, and US crude is on track to decline by about 2%.

The two benchmarks are heading towards a monthly decline, which will be the first for Brent in six months.

“The outlook for oil demand remains full of challenges as the prospects for imposing new restrictions on movement continue to grow,” ANZ Research said in a note.

And in the United States, which has the highest death rate from the Coronavirus pandemic and the largest oil consumption in the world, jobless claims rose unexpectedly last week, indicating that the economic recovery is unravelling and pushing fuel demand down.

The average demand for gasoline in four weeks was 9% below its level a year ago, government data showed on Wednesday.

In other parts of the world, daily increases in Coronavirus infections are reaching a record level and new restrictions are imposed, which will likely restrict travel and fuel demand.

In Libya, an oil tanker carried a shipment on Thursday from one of three Libyan ports that reopened in the past few days, and more cargoes are expected to be loaded in the coming days.

But analysts raise questions about how quickly Libya might boost supplies.