Oil prices pull back as surge in virus cases raises concerns about demand | Reuters

Oil prices pull back as surge in virus cases raises concerns about demand | Reuters

Oil prices slipped on Thursday as hopes for a vaccine were overshadowed by a surge in new cases of the coronavirus around the world, which raised concerns about the outlook for crude demand.

Brent crude LCOc1 settled down 14 cents to $44.20 a barrel. U.S. West Texas Intermediate crude CLc1 slipped 8 cents to settle at $41.74 a barrel.

The Brent price contango LCOc1-LCOc7, a market structure in which near-month barrels are cheaper than those in later months, implying current oversupply, was at its shallowest in more than four months. This suggests concerns about a glut are easing.

“COVID is definitely weighing on the market,” said Bob Yawger, director of energy futures at Mizuho in New York. For crude oil, specifically, though, there’s a risk that a new OPEC price war could emerge, Yawger said. “I think they will come to an agreement, but 24 hours ago, it seemed like a done deal,” he said.

While official data on Wednesday showed U.S. crude inventories USOILC=ECI rose 768,000 barrels last week, crucially the rise was smaller than the 1.7 million barrels analysts had expected in a Reuters poll.