Oil Prices on Track for Weekly Gain Despite Pandemic Case Spike

Oil prices fell Friday, feeling the pressure of a rising number of coronavirus infections, and fears of a slow economic recovery, but the hopes for a vaccine keep oil on track for now a second consecutive week of gains. 

Brent was seen down 1.2%, to $43.02 a barrel, after dropping 0.6% on Thursday. WTI, in turn, saw a 1.6% fall to $40.46 a barrel, following Thursday’s 0.8% loss. For the week, both were headed for a spike of about 9%.

Recent US government data adds more pressure, showing crude inventories have risen by 4.3 million barrels last week, compared with an expected fall of 913,000 barrels, rebirthing oversupply fears.

"Investors took profits from the recent rally as a gloomy global economic outlook dampened sentiment amid a sharp increase in coronavirus cases and new social restrictions. Oil prices are expected to stay under pressure next week if the spread of the pandemic continues to accelerate in many parts of the world.”, Koichi Murakami, an analyst at Daiichi Commodities Co Ltd comments.

The International Energy Agency (IEA), in turn, commented that global oil demand is unlikely to get a large boost from any COVID-19 vaccine until well into 2021.

"Views that it would take time to see any benefit from a COVID-19 vaccine prompted investors to unwind their long positions”, says Kazuhiko Saito, chief analyst at commodities broker Fujitomi Co. He further commented that according to chart analysis, WTI is headed toward $39.50 a barrel.

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