Virus worries loom as oil rises on improving economic data

Virus worries loom as oil rises on improving economic data

LONDON (UK) – Oil prices showed a rise on Monday, supported by improving economic data though a spike in new coronavirus infections around the world capped the gains as some countries were forced to re-implement partial lockdowns.

Brent crude rose 15 cents, or 0.4%, to $41.17 a barrel by 1145 GMT and US crude was up 26 cents, or 0.7%, at $38.75. Both contracts had fallen almost $1 earlier in the session.

Crude prices found some support as profits at China’s industrial firms rose for the first time in six months in May.

The recovery of economic sentiment in the euro zone also intensified in June after a modest pick-up in May, with improvements across all sectors and a much more buoyant sense of future business, European Commission data showed.

However, fears of a second wave of the pandemic took the sheen off the improving economic data.

The death toll from COVID-19 surpassed half a million people on Sunday, according to a Reuters tally.

“Looking ahead, anxiety is likely to remain heightened as the epic fight against the coronavirus pandemic continues. This spells bad news for risk assets (such as oil) which will inevitably remain under pressure,” said Stephen Brennock of broker PVM.

“Whilst these localised measures on their own are unlikely to see any major immediate impact on demand, they do highlight the significant risk to gasoline demand,” JBC Energy said.

Oil also found some support from the dollar’s weakness. Oil prices tend to move inversely to the US currency.

American and Canadian energy firms have cut the number of oil and natural gas rigs operating to a new record low even as higher oil prices have prompted some producers to re-start drilling.

(Photos syndicated via Reuters)
This story has been edited by BH staff and is published from a syndicated field

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