Oil Down With COVID-19 Continuing to Dampen Demand

By Bryan Wong

Investing.com- Oil was down on Thursday morning in Asia, with ever-increasing numbers of COVID-19 cases continuing to hinder investor confidence in the global economic recovery.

Brent oil futures dropped 0.12% to $43.23 by 11:51 PM ET (4:51 AM GMT) while WTI futures slid 0.20% to $40.82.

“The market is struggling to get strong conviction to the upside at the current point in time,” Lachlan Shaw, head of commodity research at National Australia Bank (OTC:NABZY) told Reuters.

“There’s mixed evidence on demand.”

The U.S. Energy Information Administration (EIA) recorded a 5.654-million-barrel surplus, considerably more than the 3.114-million-barrel draw forecasted. The surprise build prompted OPEC+ to press on over-producers such as Iraq and Nigeria, to improve their compliance with supply curbs.

Globally, the pandemic continues to hinder oil demand from some of the biggest oil consumers. The number of cases in the U.S. surpassed 3 million as of July 9. India also saw its biggest single-day spike on Wednesday, with over 25,000 new cases, according to Johns Hopkins University data.

There is also new evidence suggesting the possibility of the COVID-19 pandemic taking a turn for the worse. The World Health Organization (WHO) has acknowledged the possibility of airborne transmission of the COVID-19 virus. This could mean that the virus could create a new wave of infections that is far more difficult to control.

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