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Oil

Oil prices steady as rising Indian COVID cases counter European economic recovery

Published: Updated:

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 4 cents, or 0.1 percent, to $65.36 a barrel at 0955 GMT, while US West Texas Intermediate (WTI) US crude gained 9 cents, or 0.2 percent, to $61.52 a barrel.

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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.

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“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.”

There was also support from some improving conditions in Europe as France said schools would reopen on Monday and domestic travel curbs would end on May 3.

Both benchmark crude contracts are headed for a weekly loss of nearly 2 percent due to the resurgence of infections in India and Japan -- the world’s third and fourth largest oil importers.

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

Economic data in the United States were also 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 were back to 93 percent and 100 percent of the levels they were at before the pandemic.

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