US oil prices advance on growing fuel demand
Optimism about recovering fuel demand worldwide has been supportive of prices despite an increase in total coronavirus infections.
29 June 2020 | Business
Oil prices rose, extending gains on optimism about a recovery in fuel demand worldwide, despite a surge in coronavirus infections in some US states and signs of a revival in US crude production.
US West Texas Intermediate (WTI) crude futures gained 25 cents, or 0.7%, to US$38.97 at 0643 GMT but were on track for a slight drop for the week.
Brent crude futures rose by 32 cents, or 0.8%, to US$41.37 and were also heading for a small decline for the week.
Overall, commodities markets were taking a positive view on the global recovery on Friday despite worries about coronavirus flare-ups, said Avtar Sandu, senior manager commodities at Phillip Futures in Singapore.
"Optimism about recovering fuel demand worldwide has been supportive of prices despite an increase in total coronavirus infections worldwide and amid signs that US crude production from shale would grow," he said.
Analysts said satellite data showing a strong pick-up in traffic in China, Europe and across the United States pointed to an improvement in fuel demand.
However, there are fears a spike in Covid-19 infections in southern US states could stall the demand recovery, especially as some of those states, such as Florida and Texas, are among the biggest gasoline consumers.
The global economic outlook has also worsened or at best stayed about the same in the past month, a majority of economists polled by Reuters said, and the recession underway is expected to be deeper than earlier predicted.- Nampa/Reuters