Oil Easing on Covid-19 Cases But Heading For a Weekly Gain

Oil prices plummeted on Friday, as they are under pressure due to concerns about a slowing global economic recovery and fuel demand due to an increase in COVID-19 cases, but the market remains on track to make gains for the second week in a row, supported by hopes for a vaccine.

Prior to the opening of European markets, Brent crude fell 51 cents, or 1.2%, to $ 43.02 a barrel, after falling 0.6% on Thursday. US West Texas Intermediate crude futures fell 66 cents, or 1.6%, to $ 40.46 a barrel, after losing 0.8% on Thursday.

For the week, the two benchmarks are heading for a gain of nearly 9%. US government data imposed additional pressure on crude, as oil inventories in the United States increased by 4.3 million barrels last week compared to an expected drop of 913 thousand barrels.

New infections in the United States and elsewhere at record levels and tightening restrictions to contain the spread dampened the chances of the global health crisis ending in the near term.

Hopes for a solution to the crisis on the horizon have increased, prompting a jump in WTI and Brent contracts this week, after data showed that an experimental Covid-19 vaccine developed by Pfizer and Biontech was 90 percent effective.

But the International Energy Agency said yesterday that it is unlikely that global oil demand will receive a boost from any distribution of Covid-19 vaccines before much of 2021.