Crude clung to losses amid a combination of weak economic data and signals that a recovery in consumption might be slowing.
Futures posted a 0.4 percent decline in New York on Friday. Although strength in US equities pushed oil up from the lows of the session, futures were unable to rally amid a flurry of disappointing data points.
In the US, consumer sentiment posted a surprise drop. COVID-19 cases in the country have passed the 3.7 million mark.
Meanwhile in India, road fuel sales fell in the first half of July as virus lockdowns occurred in several cities, and the Chinese city of Urumqi locked down some areas amid fears of another outbreak in the country.
The global benchmark Brent crude dropped 0.53 percent to US$43.14 a barrel, and posting its first weekly decline in a month, falling 0.23 percent over the week.
“Consumer confidence, with its big miss today, weighed on the earlier optimism that we saw,” said Phil Flynn, senior market analyst at Price Futures Group Inc. “There’s a concern that, after the stimulus checks run out, there’s going to be a pullback in retail sales and definitely a pullback in travel by car if people are not going to be working.”
US benchmark crude futures are having trouble breaking out of the tight trading range they have been in since early last month. Major gasoline-guzzling states such as Texas and California are facing a resurgence in COVID-19 cases, squashing demand, while the OPEC+ alliance is preparing to unleash crude oil back into the market next month.
The 200-day moving average for West Texas intermediate (WTI) futures around US$43 a barrel “is keeping a lid on prices from surging higher,” said John Kilduff, a partner at Again Capital LLC. “If we can get through that, then you might see some fireworks, some more aggressive buying coming in, but for now it’s sort of a wait-and-see.”
WTI for July delivery dropped 0.39 percent to US$40.59 a barrel, gaining 0.1 percent for the week.
With prices treading water, there has been little to get excited about for traders. Volumes on the global Brent benchmark in July are heading for their lowest month since 2014, while those for WTI are set for their quietest month since 2015.
“There’s some trepidation on people’s part between the resurgence of the virus around the world limiting people heading back to work and the anticipation of OPEC increasing production,” said Sal Gilbertie, president and chief investment officer of Teucrium Trading LLC.
Additional reporting by staff writer
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