Oil prices dip on sluggish coronavirus recovery

Saturday, 22 August 2020 00:00 - - {{hitsCtrl.values.hits}}

LONDON (Reuters): Oil prices edged lower yesterday but held near a five-month high as an easing of coronavirus lockdowns aids a slow recovery in fuel demand while major crude producers seek to limit supply.

Brent crude LCOc1 futures were down 52 cents, or 1.1%, at $ 44.38 a barrel by 0850 GMT, heading for a 0.9% weekly decline.

US West Texas Intermediate (WTI) crude CLc1 futures were down 48 cents, or 1.1%, at $ 42.34 but on track for a weekly gain of about 0.9%.

The euro zone’s economic recovery from its deepest downturn on record has stuttered this month as the pent-up demand unleashed by the easing of lockdowns in July has dwindled, a survey showed yesterday. In another sign of the sluggish recovery, India’s crude oil imports fell in July to their lowest since March 2010 amid renewed coronavirus lockdowns and refinery maintenance.

“Demand, in our view, is only likely to near pre-pandemic levels in 2021 and the rest of 2020 will be a muted struggle while facing the effects of the second wave,” consultancy Rystad Energy said in a note.

At the same time, the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia were focused on ensuring that members who had overproduced against their commitments would reduce their output.