Commodity Market: US Crude Oil extends losses as spiking COVID-19 infections cast doubt on fuel demand recovery, OPEC+ curbs supply cuts

Futures on US West Texas Intermediate Crude Oil extended losses on Friday, as global fuel demand recovery remains uncertain amid the accelerating spread of the novel coronavirus in countries such as the United States, India, Spain and Australia. At the same time, oil producers prepare to ease record supply cuts from next month.

The United States set a new daily record for new COVID-19 infections on Thursday, with over 77,000 new cases reported. Meanwhile, new infections in Spain and Australia rose the most within a single day in at least two months. Spikes in new coronavirus cases add to prospects of renewed lockdown restrictions that could further weigh on fuel demand recovery.

Both WTI Crude and Brent Oil Futures retreated from recent highs on Thursday after OPEC+ agreed to ease supply cuts to 7.7 million barrels per day, starting in August.

However, according to Vivek Dhar, commodities analyst at Commonwealth Bank of Australia, the actual increase in production will be around 1 million barrels per day, since OPEC members such as Iraq agreed to larger cuts in August and September, after overproducing during the period between May and July.

Experts estimate oil prices may remain within the range of $40-$45 per barrel amid fuel demand uncertainty and prospects of new COVID-19 lockdowns. The oil market has also reached “a level where we’re concerned U.S. supply is going to come back,” according to Dhar.

As of 9:12 GMT on Friday WTI Crude Oil Futures were losing 0.57% to trade at $40.47 per barrel, while moving within a daily range of $40.33-$40.85. WTI Crude Futures have dipped 0.28% so far this week, following two straight weeks of gains.

Brent Oil Futures were losing 0.81% on the day to trade at $43.04 per barrel, while moving within a daily range of $42.90-$43.42. Brent Oil Futures have retreated 0.53% so far this week, following two consecutive weeks of gains.

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

Central Pivot – $40.80
R1 – $41.07
R2 – $41.44
R3 – $41.71
R4 – $41.98

S1 – $40.43
S2 – $40.16
S3 – $39.79
S4 – $39.42

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

Central Pivot – $43.44
R1 – $43.73
R2 – $44.06
R3 – $44.35
R4 – $44.63

S1 – $43.11
S2 – $42.82
S3 – $42.49
S4 – $42.15

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