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Commodity Market: US Crude Oil pares weekly gains as concerns mount COVID-19 resurgence could hamper demand recovery

Futures on US West Texas Intermediate Crude Oil retreated on Friday, paring gains achieved so far this week, as concerns re-emerged that the new wave of COVID-19 infections across the United States and elsewhere could hamper fuel demand recovery.

The United States, the largest oil consumer globally, reported over 55,000 new COVID-19 infections on Thursday, or the sharpest single-day surge since the pandemic began. Florida alone reported over 10,000 new infections, or the sharpest daily increase in that state so far. The new wave of infections has already prompted several states to postpone their reopening plans after months of lockdown restrictions.

“The market has become increasingly confident that easing restrictions on travel and business would boost demand for crude oil, but the pandemic’s progress threatens to derail this recovery,” ANZ Research pointed out in an investor note.

On Thursday WTI Crude futures surged more than 1% following an upbeat US jobs growth report. US economy, excluding the farming industry, added 4.8 million jobs in June, or the most since comparable series began in 1939 and well above market expectations of a 3.0 million jobs gain.

Another oil-supporting factor was a larger-than-anticipated drop in US crude oil inventories. EIA’s weekly Petroleum Status Report said crude oil stocks decreased by 7.195 million barrels during the week ended June 26th, while analysts on average had expected a drop by 0.710 million barrels. It has been the sharpest drop in crude oil inventories since the week ended December 27th 2019.

As of 9:26 GMT on Friday WTI Crude Oil Futures were retreating 0.66% to trade at $40.09 per barrel, while moving within a daily range of $40.05-$40.48. WTI Crude futures have risen 5.06% so far this week, while being poised to register their eighth gain in the past ten weeks.

Brent Oil Futures were losing 0.68% on the day to trade at $42.62 per barrel, as they were moving within a daily range of $42.52-$42.96. Brent futures have risen 4.72% so far this week, while also being set to record their eighth gain in ten weeks.

Daily Pivot Levels (traditional method of calculation) – WTI Crude Oil Futures

Central Pivot – $40.19
R1 – $40.89
R2 – $41.43
R3 – $42.13
R4 – $42.83

S1 – $39.65
S2 – $38.95
S3 – $38.41
S4 – $37.87

Daily Pivot Levels (traditional method of calculation) – Brent Oil Futures

Central Pivot – $42.62
R1 – $43.50
R2 – $44.09
R3 – $44.97
R4 – $45.85

S1 – $42.03
S2 – $41.15
S3 – $40.56
S4 – $39.97 is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover Forex, Price Action and Social Trading.

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