Oil steady as rising Indian Covid cases counter European recovery

Both crude benchmarks are headed for weekly loss of more than 2%

LONDON:

Oil prices were broadly steady on Friday with support from a European economic recovery countered by persisting coronavirus concerns as infections surged to record levels in India.

Brent crude dipped $0.04, or 0.1%, to $65.36 a barrel at 0955 GMT, while US West Texas Intermediate (WTI) crude gained $0.09, or 0.2%, to $61.52 a barrel.

Euro zone Purchasing Managers’ Index (PMI) data for April showed a stronger than expected recovery and more European states began easing coronavirus lockdowns. France said schools would reopen on Monday.

“Stronger PMIs across Europe, a weaker US dollar, and some European countries planning to ease some of their restrictions are slightly supporting oil prices,” UBS oil analyst Giovanni Staunovo said.

“Oil demand concerns in India due to rising Covid cases are capping the upside.”

Both benchmark crudes were headed for a weekly loss of more than 2% due to the resurgence of infections in India and Japan, the world’s third and fourth largest oil importers respectively.

Several countries, including Australia, Britain, Canada, and the United Arab Emirates have barred or cut flights from India.

Japan declared a state of emergency in Tokyo, Osaka and two other prefectures on Friday.

Adding to the more upbeat outlook, US economic data was positive and the number of Americans filing new claims for unemployment benefits fell to a 13-month low last week.

“The US oil demand outlook continues to go from strength to strength. Latest weekly jobless claims brought more good macro news for the world’s biggest economy,” said Stephen Brennock of oil broker PVM.

US refiner Valero said gasoline and diesel demand was at 93% and 100% of pre-pandemic levels.