Oil Heading for Weekly Drop With Virus Surge Clouding Outlook - Bloomberg

Oil Heading for Weekly Drop With Virus Surge Clouding Outlook - Bloomberg:

Oil in New York is heading for a weekly decline as surging coronavirus cases raised fresh concerns about demand, while the market is continuing to grapple with ample supply.

Futures slipped below $39 a barrel and are down 4.6% so far this week. Surging infections across major economies is leading to the tightening of restrictions to curb the outbreak, with the virus showing no signs of abating. Meanwhile, U.S. crude stockpiles are near record highs and tankers that have been storing much of the world’s oil as demand cratered are starting to offload cargoes.

Oil’s rally from its plunge below zero in April has stalled, with volatility near the lowest level since February after a tumultuous few months sparked by virus-driven demand destruction. Historic output cuts from OPEC and its allies are set to ease next month and the market will be looking for any supply response from producers as curbs are relaxed.