U.S. West Texas Intermediate crude oil futures are trading slightly better on Friday after posting a steep sell-off the previous session. The strength is probably just a knee-jerk reaction to increased demand for risky assets after stocks plummeted on Thursday. Despite the marginal strength, the market is still trading lower for the week and in a position to form a technically bearish closing price reversal top that could signal the start of a 2 to 3-week correction.
Second Wave of COVID-19 Cases Raises Demand Concerns
Crude oil futures are being pressured this week due to worries about weak global energy demand.
Traders blamed the weakness on concerns over a surge in U.S. coronavirus cases this week that raised the prospect of a second wave of the COVID-19 outbreak hitting demand in the world’s top consumer of crude and fuel.
Reuters said the reality that the coronavirus pandemic may be far from over has brought the rally that raised oil off April lows to a shuddering halt, with infections in the United States alone passing 2 million.
US Supply Issues Move to Forefront
U.S. crude inventories rose unexpectedly by 5.7 million barrels in the week to June 5 to 538.1 million barrels – a record – as imports were boosted by the arrival of supplies bought by refiners when Saudi Arabia flooded the market with cheap oil in March and April, Energy Information Administration (EIA) data showed.
The EIA report also showed gasoline…