Oil futures lost ground Thursday, pressured by worries a resurgence in coronavirus cases around the world will cause demand to falter as major oil producers begin relaxing output curbs.
West Texas Intermediate crude for September delivery on the New York Mercantile Exchange dropped 74 cents, or 1.8%, to $40.53 a barrel, while October Brent crude was off 69 cents, or 1.5%, at $43.40 a barrel.
“There is a clear toppish sentiment in oil markets where the hesitation to carry the prices higher could trigger a retracement below $40 per barrel,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank, in a note. “Prospects of slower economic recovery and the OPEC’s hurry to trim production cuts point that the demand/supply dynamics are not supportive of further short-term gains in oil markets.”
The number of COVID-19 cases around the world climbed above 17 million on Thursday, according to data aggregated by Johns Hopkins University, and the death toll rose to 667,688. The U.S. case tally climbed to 4.43 million and the death toll rose to 151,716, after crossing 150,000 late Wednesday. California and Florida posted single-day record death numbers on Wednesday and California added more than 12,300 cases, according to the New York Times.
Oil rose Wednesday after the Energy Information Administration reported that U.S. crude inventories fell by 10.6 million barrels for the week ended July 24, the largest weekly decline since the 11.5 million-barrel fall reported for the week ended Dec. 27.
The Organization of the Petroleum Exporting Countries and its allies, known collectively as OPEC+, are due in August to boost output by around 2 million barrels a day as they relax production curbs put in place earlier this year.