Oil prices head for weekly decline as coronavirus cases surge in U.S. and elsewhere

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Reuters
KEY POINTS
  • Oil prices fell on Friday, adding to steep losses from the previous session, and were headed for weekly declines on worries that renewed lockdowns would suppress demand.
  • Brent crude was down by 25 cents, or 0.6%, at $42.10 a barrel by 0341 GMT after falling more than 2% on Thursday.
  • U.S. oil fell 33 cents, or 0.8%, at $39.29 a barrel after a drop of 3% in the previous session.
The sun sets behind a crude oil pump jack on a drill pad in the Permian Basin in Loving County, Texas, U.S. November 24, 2019.
The sun sets behind a crude oil pump jack on a drill pad in the Permian Basin in Loving County, Texas, U.S. November 24, 2019.
Angus Mordant | Reuters

Oil prices fell on Friday, adding to steep losses from the previous session, and were headed for weekly declines on worries that renewed lockdowns following a surge in coronavirus cases in the United States and elsewhere would suppress fuel demand.

Brent crude was down by 25 cents, or 0.6%, at $42.10 a barrel by 0341 GMT after falling more than 2% on Thursday.

U.S. oil fell 33 cents, or 0.8%, at $39.29 a barrel after a drop of 3% in the previous session.

Brent looks set for a weekly decline of nearly 2% and U.S. crude for a fall of more than 3%. Trading was quiet with Singapore on holiday for an election.

While many analysts are expecting economies and fuel demand to bounce back from the pandemic, record daily increases in coronavirus infections in the United States, the world’s biggest oil consumer, raised concerns about the pace of any recovery.

“I do not suspect many oil traders will be looking to place significant bids in the market today, suggesting prices may continue to wallow into the weekend,” said Stephen Innes, chief global markets strategist at AxiCorp.

More than 60,500 new Covid-19 cases were reported in the United States on Thursday, setting a daily record, with Americans being told to take new precautions. The tally was also the highest daily count yet for any country since the pathogen emerged in China late last year.

In Australia, the government on Friday will consider reducing the number of citizens allowed to return to the country from overseas, after authorities ordered a new lockdown of the country’s second-most populous city, Melbourne.

Oil inventories also remain bloated due to the evaporation of demand for gasoline, diesel and other fuels during the initial outbreak.

U.S. crude oil inventories rose by nearly 6 million barrels last week after analysts had forecast a decline of just over half that figure.

Brent oil rises to $40 amid hopes for output cuts, recovery

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Reuters
KEY POINTS
  • Brent crude futures for August rose 43 cents, or 1.1%, at $40 a barrel, by 0252 GMT. The contract climbed to as high as $40.42, the highest since March 6, after gaining 3.3% on Tuesday.
  • U.S. West Texas Intermediate (WTI) crude futures gained 68 cents, or 1.9%, at $37.49 a barrel. It rose to as much as $37.88, also the highest since March 6. The contract ended the previous session up 3.9%.
An offshore oil platform is seen with a tanker in the distance on April 20, 2020 in Huntington Beach, California.
An offshore oil platform is seen with a tanker in the distance on April 20, 2020 in Huntington Beach, California.
Michael Heiman | Getty Images

Oil rose on Wednesday, with Brent at $40 for the first time since March, as optimism mounted that major producers will extend production cuts and a recovery from the coronavirus pandemic will spur fuel demand.

Brent crude futures for August rose 43 cents, or 1.1%, at $40 a barrel, by 0252 GMT. The contract climbed to as high as $40.42, the highest since March 6, after gaining 3.3% on Tuesday.

U.S. West Texas Intermediate (WTI) crude futures gained 68 cents, or 1.9%, at $37.49 a barrel. It rose to as much as $37.88, also the highest since March 6. The contract ended the previous session up 3.9%.

Both benchmarks have risen sharply in recent weeks from the lows of April, buoyed by a continuing recovery in China, the epicenter of the virus outbreak, while other economies are slowly opening up after lockdowns to contain its spread.

The Organization of the Petroleum Exporting Countries (OPEC) and other major producers including Russia, a group known as OPEC+, may extend production cuts of 9.7 million barrels per day (bpd), or about 10% of global output, into July or August, sources told Reuters.

The cuts are currently due to run through May and June, scaling back to a reduction of 7.7 million bpd from July to December, but Saudi Arabia has been pushing to keep the deeper cuts in place for longer.

“Even deeper cuts will speed up the process of rebalancing the market,” ING Economics said, noting the “market was already set to transition from surplus to deficit as we move into the second half of this year.”

With the date of the meeting not yet set and some calling for it to be early as this week, much remains up in the air, however.

But the demand picture is looking brighter as economies including China, the world’s second-biggest oil consumer, start to recover from the pandemic.

“As virus-related lockdown measures continue to be lifted, we expect that demand will gradually recover,” Capital Economics said in a note, estimating that global oil consumption will fall to just under 92 million bpd on average in 2020.

This compared with 100.2 million bpd in 2019, it said, before the pandemic swept through Europe and the United States, evaporating demand for everything from flying to trips to the dentist.

U.S. crude oil inventories fell by 483,000 barrels in the week to May 29, the American Petroleum Institute said on Tuesday. Gasoline and distillate fuel stockpiles rose.

Official government inventory data will be released later on Wednesday.

Those figures still show U.S. stockpiles remain high and are forecast to have risen for a second week in a row.

Oil rises on signs of firmer demand, fall in U.S. crude stocks

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Reuters
KEY POINTS
  • Brent crude futures for July delivery were up 23 cents, or 0.7%, at $34.88 per barrel at 0347 GMT.
  • U.S. West Texas Intermediate (WTI) crude futures for July were up 14 cents, or 0.4%, at $32.10 a barrel.
An offshore oil platform is seen with a tanker in the distance on April 20, 2020 in Huntington Beach, California.
An offshore oil platform is seen with a tanker in the distance on April 20, 2020 in Huntington Beach, California.
Michael Heiman | Getty Images

Oil prices rose on Wednesday amid signs of improving demand and a drawdown in U.S. crude inventories but worries over the economic fallout from the coronavirus pandemic capped gains.

Brent crude futures for July delivery were up 23 cents, or 0.7%, at $34.88 per barrel at 0347 GMT.

U.S. West Texas Intermediate (WTI) crude futures for July were up 14 cents, or 0.4%, at $32.10 a barrel. The July contract closed on Tuesday at $31.96, up 1%.

The June contract expired on Tuesday at $32.50 a barrel, up 2.1%, as the WTI futures market avoided the chaos of last month’s May expiry, when prices sank below zero.

Oil prices have mainly risen during the past three weeks, with both benchmarks climbing above $30 for the first time in more than a month on Monday, supported by massive output cuts by major oil producing countries and signs of improving demand.

U.S. crude inventories fell by 4.8 million barrels to 521.3 million barrels in the week to May 15, data from industry group the American Petroleum Institute (API) showed on Tuesday.

Refinery runs rose by 229,000 barrels per day, the API said, a sign that plants are trying to produce more fuel as the United States eases its lockdowns put in place to halt the spread of the novel coronavirus.

Official data from the Energy Information Administration (EIA) is due at 10:30 a.m. (1430 GMT) on Wednesday.

“Oil markets have worried about high crude inventories but yesterday the WTI June contract expired and rolled over to July smoothly as concerns over crude stocks ease and demand has improved in the short-term,” said Kim Kwang-rae, commodity analyst at Samsung Securities in Seoul.

Asia’s gasoline profit margins turned positive on Tuesday for the first in nearly two months, giving hope to global oil refiners.

But lingering concerns about the economic fallout from the coronavirus pandemic, especially in the United States which is the world’s biggest oil consumer, kept a lid on prices.

U.S. Federal Reserve Chair Jerome Powell said on Tuesday layoffs by state and local governments will slow the U.S. economic recovery, while Boston Federal Reserve Bank President Eric Rosengren said the U.S. unemployment rate is likely to stay at double-digit levels through the end of the year.

Coronavirus live updates: India surpasses China as cases spike; Italy eases travel restrictions

CNBC

Weizhen Tan
KEY POINTS
  • Brazil confirmed 15,305 new cases, bringing its total to 218,223.
  • Mexico had 2,437 new cases, that brought its tally to 45,032 confirmed infections.
  • Global cases surpassed 4.5 million, with the number of cases in Latin America surging.

This is CNBC’s live blog covering all the latest news on the coronavirus outbreak. This blog will be updated throughout the day as the news breaks.

  • Global cases: More than 4.5 million
  • Global deaths: At least 307,159
  • Most cases reported: United States (More than 1.4 million), Russia (262,843), United Kingdom (238,004), Spain (230,183), Italy (223,885).

The data above was compiled by Johns Hopkins University as of 9:40 a.m. Beijing time.

All times below are in Beijing time.

5:00 pm: Russia reports 9,200 new infections

Russia reported 9,200 new confirmed cases, bringing its total to 272,043, according to Reuters.

There were 119 deaths, with the total number of fatalities now at 2,537, the report said. Russia is the second worst-hit country, after the U.S., according to data from Johns Hopkins University. — Weizhen Tan

4:40 pm: More than 500 beaches in Greece reopen

Greek residents flocked to beaches on Saturday as more than 500 of them reopened, with Greece easing restrictions earlier this month, according to Reuters.

Beach goers were required to keep to distancing rules, with no more than 40 people allowed per 1,000 square meters. — Weizhen Tan

3:30 pm: Singapore confirms 465 new cases

Singapore has reported another 465 cases of Covid-19, taking its tally to 27,356, the health ministry said.

Most of the new cases are migrant workers living in dormitories, said the ministry. Those workers, mostly men from other Asian countries, have accounted for a vast majority of cases in the Southeast Asian city-state. — Weizhen Tan

2:15 pm: Germany reports 620 new cases

Germany’s total cases jumped by 620 to 173,772, according to the latest data by Robert Koch Institute, a federal government agency responsible for disease monitoring and prevention.

The country’s death toll increased by 57 to 7,881, the data showed. — Weizhen Tan

1:15 pm: Italy eases travel restrictions

The Italian government is easing travel restrictions imposed due to the coronavirus pandemic, allowing people to move freely inside the region where they live as of Monday, and between regions starting June 3.

The government decree announced early Saturday also permits international travel to and from Italy from June 3.

Italy imposed nationwide lockdown rules in early March after it became the first country outside Asia with a major outbreak of coronavirus. But the government led by Premier Giuseppe Conte has gradually reopened the country as the rates of infections and deaths have fallen.

Social distancing rules are being implemented in the sectors of the economy that have reopened, including factories and some businesses. Schools remain closed and crowds are not permitted, though people will be allowed to attend Mass in churches with some restrictions starting next week. — Associated Press

12:45 pm: India surpasses China as cases surge

Migrant labourers stand in a queue for medical checkup after reaching quarantine center at their hometown Allahabad during Government imposed nationwide lockdown as a preventive measure against the COVID-19 corona virus in Allahabad, India on April 27, 2020.
Migrant labourers stand in a queue for medical checkup after reaching quarantine center at their hometown Allahabad during Government imposed nationwide lockdown as a preventive measure against the COVID-19 corona virus in Allahabad, India on April 27, 2020.
Ritesh Shukla | NurPhoto via Getty Images

The number of cases in India surged to surpass that of China, climbing to a total of 85,940 infections, according to its health ministry. In the last 24 hours, India confirmed 3,970 new cases and 103 fatalities, according to AP.

India is now the 11th worst-hit country globally, with China falling back to be the 13th most affected (see 10:30 a.m. update), according to data from Johns Hopkins University.

India’s Prime Minister Narendra Modi said Monday that the country would look to ease a nearly seven-week lockdown despite reporting its largest single-day jump in cases this week, according to Reuters. Its lockdown had repeatedly been extended, with the latest until May 17. — Weizhen Tan

11:20 am: South Korea reports 19 new cases

South Korea reported 19 new cases, as infections continued to climb following a growing outbreak linked to a number of night clubs. That came after weeks of single-digit or zero infections.

That brought its tally to 11,037 cases, according to the Korea Centers for Disease Control and Prevention. It had two new deaths.

Despite the new night club cluster in its capital city of Seoul, South Korea said this week that it had no plans to restore social distancing rules, which it eased last week, according to Reuters. — Weizhen Tan

10:30 am: China reports 8 new cases

China’s National Health Commission reported eight new cases, six of which were imported infections, or attributed to travelers from overseas. That brings its total to 82,941 confirmed cases.

There were no new deaths, with fatalities staying at 4,633, according to the NHC. There were 13 new asymptomatic cases, where patients do not display symptoms of the disease. In all, 561 asymptomatic cases were under medical observation. — Weizhen Tan

10:05 am: House Democrats pass $3 trillion coronavirus relief package

House Democrats on Friday passed a $3 trillion coronavirus relief package, which Senate Republicans pledged to block.

The House passed the rescue legislation in a close 208-199 vote, with 14 Democrats voting against the bill and one Republican supporting it.

Here’s what the bill includes. — Jacob Pramuk

9:40 am: Brazil, Mexico report record daily highs

Passengers wearing protective masks at Estacao da Luz, central region of the city of Sao Paulo, Brazil, on May 11, 2020.
Passengers wearing protective masks at Estacao da Luz, central region of the city of Sao Paulo, Brazil, on May 11, 2020.
NurPhoto

For a second day running this week, both Brazil and Mexico reported record daily highs.

Brazil confirmed 15,305 new cases, bringing its total to 218,223, according to Reuters citing its health ministry. It had 824 deaths, to reach 14,817 fatalities in total.

Turmoil in the Latin American country climbed further as it lost its second health minister in a month as the crisis worsened, according to Reuters.

Mexico had 2,437 new cases, according to a Reuters report. That brought its tally to 45,032 confirmed infections.

The country reported 290 more deaths to a total of 4,767 fatalities, the report said. — Weizhen Tan

9:20 am: U.S. retail sales report signals more rapid restructuring of retail business

The 16.4% plunge in April retail sales signals the retail industry will face a  more rapid restructuring with more failures and store closings. Online shopping was the only segment of the retail sector that showed improvement during the month, when most states were shut down.

Economists said department stores were the biggest losers but big box stores, like Costco and Walmart, were not down nearly as much and held their own. Online sales rose 8%. — Patti Domm

9:05 am: Global cases cross 4.5 million

Global cases surpassed 4.5 million, with the number of cases in Latin America surging.

Brazil and Mexico both reported record increases in their number of new cases this week, as the infections in other parts of the world such as Europe is slowing.

Confirmed cases in Brazil surpassed that of Germany and France this week. The South American country now has the sixth highest number of infections, with 218,223 cases reported, according to the latest data from Johns Hopkins University. — Weizhen Tan

Oil prices drop amid supply glut, fears of 2nd coronavirus wave

CNBC

Reuters
KEY POINTS
  • Brent crude futures were down 29 cents, or 0.9%, at $30.68 a barrel by 0431 GMT.
  • U.S. West Texas Intermediate crude futures fell 17 cents, or 0.7%, to $24.57 a barrel.
An aerial view of oil tankers anchored near the ports of Long Beach and Los Angeles amid the coronavirus pandemic on April 28, 2020 off the coast of Long Beach, California.
An aerial view of oil tankers anchored near the ports of Long Beach and Los Angeles amid the coronavirus pandemic on April 28, 2020 off the coast of Long Beach, California.
Mario Tama | Getty Images

Oil prices fell on Monday as concern over a persistent glut and economic gloom caused by the coronavirus pandemic combined to cancel out support from supply cuts at some of the world’s top producers.

Brent crude futures were down 29 cents, or 0.9%, at $30.68 a barrel by 0431 GMT, while U.S. West Texas Intermediate crude futures fell 17 cents, or 0.7%, to $24.57 a barrel.

Both benchmarks have notched up gains over the past two weeks as countries have eased business and social lockdowns imposed to cope with the coronavirus and fuel demand has rebounded modestly. Oil production worldwide is also declining.

But possible signs of a second wave of coronavirus infections in northeast China and South Korea worried investors even as more countries started to pivot towards easing pandemic restrictions in moves that could support oil demand.

Goldman Sachs analysts said there was still concern that demand will stay weak in 2021, with worries about a second wave of Covid-19 cases and only a modest increase in personal or corporate travel.

Global oil demand has plummeted by about 30% as the coronavirus pandemic curtailed movement across the world, building up inventories globally.

Fears that the United States is running out of storage space triggered WTI prices crashing into negative territory last month, prompting some U.S. producers to slash output.

In a sign of that impact, the number of operating oil and gas rigs in the world’s largest oil producer fell to 74 in the week to May 8, a record low according to data released on Friday from energy services firm Baker Hughes going back to 1940.

“People are surprised by how quickly the U.S. is shutting in production and that’s exactly what we need in order to support prices,” said Tony Nunan, a senior risk manager at Mitsubishi Corp in Tokyo.

“There’s another 10 days before the June contract expires … if the WTI contract can avoid a crash going into expiry, hopefully we’ve seen the bottom.”