Oil prices edged up on Friday as the uptrend from signs of fuel demand recovery was kept in check by a spike in the number of new coronavirus infections in the United States and China, and tentative expectations of U.S. output rising.
Bonny Light, Nigeria’s premium crude grade, added up 44 cents or 1.09% to close at $40.70 per barrel at the last session just as another national grade, Qua Iboe, inched up by $1.06 or 2.64% to $41.21 a barrel.
Both Brent and WTI are on track for a weekly fall of nearly 1.7% after record U.S. crude stock data caused a pullback in prices on Wednesday.
According to analysts, satellite data showing a robust uptick in traffic in China, Europe and across the U.S. implies an improvement in fuel demand.
Gridlock in Shanghai over the past couple of weeks was greater than in the same period last year, while in Moscow traffic was back to last year’s levels, data provided to Reuters by location technology firm, TomTom revealed.
There are, nevertheless, concerns about rise in coronavirus cases in southern U.S. states could stand in the way of demand recovery, particularly as some of those states, including Florida and Texas, are among the biggest gasoline consumers.
The world economic outlook has also taken a turn for the worse or at best stayed around the same in the past month, according to a majority of economists polled by Reuters, and the recession underway is envisaged to be deeper than earlier predicted.
Michael McCarthy, Chief Market Strategist at CMC Markets, said “it does appear the market is ignoring supply and demand fundamentals and moving on sentiment.
The possibility of expanded U.S. crude production also limited gains on Friday.