Oil prices broadly stable as demand upswing balances virus concerns
By Shadia Nasralla
LONDON (Reuters) - Oil prices were broadly stable on Friday as the upward trend was kept under control due to signs of a recovery in fuel demand due to an increasing number of new coronavirus cases in the US and China and preliminary expectations of increasing US production.
Brent crude futures rose 15 cents to $ 41.20 at 1159 GMT. US West Texas Intermediate (WTI) crude oil futures fell 6 cents to $ 38.66 and erased previous gains.
The contracts are on the way to weekly declines of around 2.3% and 2.7%, respectively, after record data from US crude stocks pushed prices down on Wednesday. [RRP / S]
Overloading in Shanghai has been higher in the past few weeks than in the same period last year, while traffic in Moscow has returned to the previous year's level, data from location technology company TomTom showed to Reuters.
"In some major cities around the world, June traffic levels reached last year's level, indicating that fuel demand is normalizing," Commerzbank said in a note.
GRAPHICS: April gasoline demand - https://fingfx.thomsonreuters.com/gfx/ce/yzdvxrrybvx/SC.JPG
However, there is concern that an increase in COVID-19 infections in the southern US could hamper the recovery in demand, especially since some of these states, such as Florida and Texas, are among the largest petrol consumers.
The global economic outlook has also worsened or at best remained roughly the same over the past month, a majority of the economists surveyed by Reuters said, and the current recession is expected to be deeper than predicted earlier.
"It appears the market is ignoring the fundamentals of supply and demand and is evolving sentiment," said Michael McCarthy, chief market strategist at CMC Markets.
The prospect of an increase in US crude oil production also kept Friday's profits under control.
A survey by the Dallas Federal Reserve Bank of executives in the leading oil and gas exploration region in the United States found that more than half of the executives who are slowing down production expect production to resume by the end of July.
The US rig count dates are due later on Friday.
(Additional reporting by Aaron Sheldrick in Tokyo and Sonali Paul in Melbourne; editing by Kirsten Donovan and Steve Orlofsky)
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