Commodity Market: US Crude Oil on track for a weekly loss as resurgent virus adds to fuel demand worries

Futures on US West Texas Intermediate Crude Oil extended gains from the prior trading day on Friday, supported by a drop in US crude oil, gasoline and distillate inventories last week, as reported by the Energy Information Administration.

However, further upside may be capped as virus resurgence in Europe and elsewhere added to prospects of new mobility restrictions being introduced, which would hinder fuel demand recovery.

Uncertainty surrounding US coronavirus aid bill and an unexpected surge in US jobless claims last week also weighed on market risk sentiment.

In India, a government report showed that crude oil processing at refineries had shrunk at an annual rate of 26.4% in August to 16.15 million tonnes as fuel demand decreased due to rising new COVID-19 infections.

WTI Crude Oil was on track to register its third weekly loss in the past four weeks, being down 2.08%, while Brent Oil has dropped 2.46% so far this week.

Meanwhile, on the supply side, Libyan oil export terminals resumed oil shipments from refineries, which had been under blockade for months.

“The prospect of the return of Libyan barrels to the market is adding to the bearish sentiment,” RBC Capital Markets analysts wrote in an investor note.

“However, we think the return of the barrels will be slow and subject to reversal based on the volatile security and political picture.”

As of 8:40 GMT on Friday WTI Crude Oil Futures were edging up 0.25% to trade at $40.41 per barrel, while moving within a daily range of $40.13-$40.64 per barrel. WTI Crude Futures have retreated 4.93% so far in September, following four straight months of gains.

Brent Oil Futures were gaining 1.27% on the day to trade at $42.26 per barrel, while moving within a daily range of $41.78-$42.28 per barrel. Brent Oil Futures have dropped 7.20% so far in September, following five straight months of gains.

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

Central Pivot – $39.93
R1 – $40.75
R2 – $41.18
R3 – $42.00
R4 – $42.81

S1 – $39.50
S2 – $38.68
S3 – $38.25
S4 – $37.81

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

Central Pivot – $41.67
R1 – $42.06
R2 – $42.39
R3 – $42.78
R4 – $43.17

S1 – $41.34
S2 – $40.95
S3 – $40.62
S4 – $40.29