U.S. West Texas Intermediate crude oil futures are trading mixed at the end of the week and poised to close lower for the week as inventories rose and record-breaking new coronavirus cases in the United States stoked concern about the pace of economic recovery and fuel demand. Meanwhile, the International Energy Agency (IEA) bumped up its 2020 oil demand forecast on Friday, but warned that the spread of COVID-19 posed a risk to the outlook.
“While the oil market has undoubtedly made progress…the large, and in some countries, accelerating number of COVID-19 cases is a disturbing reminder that the pandemic is not under control,” the IEA said.
Prices also dropped after Libya National Oil Corporation announced it had lifted its force majeure on all oil exports after a half-year blockade by eastern forces.
The new worries about fuel demand surfaced just one day after data from the U.S. Energy Information Administration showed U.S. gasoline stockpiles fell by 4.8 million barrels last week, much more than analysts expected, as demand hit its highest level since March 20.
Investors are starting to lighten up on the long side because they feel support will disappear after this week as coronavirus cases are surging in several U.S. states. A spike in coronavirus cases across several U.S. states raised the prospect of renewed lockdowns and other restrictions that would dent any sustained recovery in fuel demand.
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