U.S. West Texas Intermediate crude oil futures are set for a weekly decline due to mounting worries about the impact on fuel demand of a widespread resurgence in coronavirus infections, as well as some concern about the likely return of exports from Libya. The U.S. benchmark is also heading for a monthly loss.
U.S. fuel demand remains under pressure as the pandemic constrains travel. The four-week average of gasoline demand last week was 9% below a year earlier, government data showed on Wednesday. Demand is likely to weaken over the near-term because the increasing coronavirus numbers are slowing the economic recovery.
In the United States, which has the highest death toll from the coronavirus pandemic and is the world’s biggest oil consumer, unemployment claims unexpectedly rose last week suggesting an economic recovery is sputtering and pushing down fuel demand.
Globally, in other parts of the world, the situation is getting even worse. Daily increases of coronavirus infections are hitting records and new restrictions are being put in place that will likely limit travel and fuel demand.
While most traders are monitoring the situations in Europe and Asia, there are bearish developments in India too. According to reports, throughput by crude oil refiners in August fell 26.4% from a year ago, the most in four months, as fuel demand ebbed because surging coronavirus cases hindered industrial and transport activity.