Oil slips below $45/bbl on demand concerns but posts weekly rise

Andrew Cummings
August 9, 2020

Stena Bulk AB, one of the world's biggest tanker lines, plans to run some of its ships on used cooking oil to offer customers a way to offset their pollution.

A weaker U.S. dollar was also supportive for oil prices as it makes dollar-priced oil cheaper for holders of other currencies.

For the week, WTI crude oil futures gained 2.1%.

While OPEC+ eased production cuts this month, Iraq promised to step up its commitments having failed to deliver on previous cuts, removing just 11,000 barrels a day last month according to Bloomberg.

Iraq is OPEC's second biggest producer and this adjustment should put their new target at 3.4 million barrels a day for a couple of months. The move comes as Saudi Arabia cut pricing to Asia and Europe less than expected and left prices for the USA unchanged at the highest levels in months.

Talks between U.S. lawmakers over another round of stimulus have stalled, meanwhile.

Oil prices were mixed on Thursday as the falling U.S. dollar offset some of the concerns that fuel demand could stall because of rising global coronavirus infections.

Futures are up about 3.6% so far this week after closing on Wednesday at the highest level since March 5.

Brent crude was trading 0.09 per cent lower at United States dollars 45.05 per barrel in NY.

At 10:25 am Singapore time (0225 GMT), the ICE Brent October crude futures was up 6 cents/b (0.09%) from the August 6 settle at $45.15/b, while NYMEX September light sweet crude contract was up by 4 cents/b (0.1%) at $41.99/b.

Oil prices were mostly flat on Thursday, as a boost from lower-than-expected US crude stocks that lifted the market to five-month highs in the previous session gave way to fuel demand concerns amid rising coronavirus infections.

"In the medium term the weak demand is likely to weigh more heavily than the positive sentiment (is supportive), which is why we expect prices to correct in the near future", Commerzbank analyst Eugen Weinberg said.

Strategic petroleum reserves, which are not included in the commercial crude stocks, remained unchanged at 656.1 million barrels for the week ending July 31, the data revealed.

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