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Oil set for weekly fall amidst coronavirus rise fear; Bonny Light sheds $0.68

Oil prices dip amid negative sentiments from U.S. coronavirus surge, Bonny Light gains

Oil prices climbed on Friday but were on course for a weekly drop by reason of rising fears about the impact of a sweeping re-emergence of coronavirus infections on fuel demand, and anxiety about the potential return of exports from Libya.

Brent crude added 30 cents at $42.24 a barrel by 09:55 West Africa Time, while U.S. West Texas Intermediate crude gained 23 cents at $40.54.

Bonny Light, Nigeria’s banner oil grade, shed 68 cents at $40.78 per barrel on Thursday. But Qua Iboe, another major national grade gained 34 cents at $41.35.

“This month has not been kind to the oil market. Rising virus infections, renewed lockdowns, slowing economic recovery and stalled U.S. stimulus talks have put the brakes on the fragile revival in fuel demand,” Stephen Brennock of oil broker PVM said.

An economic rebound in the U.S. is flailing and hurting fuel demand recovery, with unemployment claims leaping contrary to analysts’ expectation last week.

Read also: Oil prices rise on U.S. fuel inventory drop, Bonny Light up by 52 cents

The outlook of fuel demand has been dimmed by the obstruction of travel by COVID-19.

Government data on Wednesday showed gasoline demand’s four-week average fell 9% lower than its level one year ago.

Coronavirus daily upticks in the rest of the world are touching new highs just as new curbs are being imposed that may arrest travel and fuel demand.

At one of the three Libyan terminals that restarted operations some days ago, an oil tanker was loading a cargo on Thursday and more are expected to be lifted in the days ahead.

The potential pace of supply by Libya is causing investors to worry.

Jeffrey Halley, senior market analyst at OANDA, said “fundamentally, nothing has changed to the supply side of the equation that is weighing on oil prices in the bigger picture.”

Ronald Adamolekun

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Ronald Adamolekun

Ronald Adamolekun is a creative writer with a mixed bag of experience in fields as diverse as data journalism, financial reporting and editing.

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