Oil prices little changed

03 Jul 2020 / 00:13 H.

NEW YORK: Oil futures were little changed yesterday, supported by a fall in US unemployment and Wednesday's drawdown in crude inventories, but the spike in US coronavirus infections fanned concerns that economic activity will weaken in coming weeks.

New Covid-19 cases in the United States rose by nearly 50,000 on Wednesday, according to a Reuters tally, the biggest one-day spike since the start of the pandemic.

Numerous states are advising citizens to restrict movements and closing bars and restaurants again, which is expected to hamper further job growth.

Brent crude futures gained 10 cents to trade at US$42.13 a barrel by 1517 GMT, after rising 1.8% in the previous session. US West Texas Intermediate (WTI) crude futures lost 18 cents to US$39.64 a barrel after a 1.4% rise on Wednesday.

US non-farm payrolls increased by 4.8 million in June, the Labor Department reported, beating expectations, even as permanent job losses rose. Traders said the data could lessen the desire in Washington for more federal support for the economy.

"The jobs report was good, but the flip side of that was that it was so good that it might inhibit a stimulus programme," said Bob Yawger, director of energy futures at Mizuho.

US crude inventories fell 7.2 million barrels from a record high last week, far more than analysts had expected, US Energy Information Administration data showed, as refiners ramped up production and imports eased.

Gasoline stockpiles were higher, however, and the spike in cases in heavily populated US Sun Belt states, among the country's biggest consumers of gasoline, could hit fuel demand headed into the July 4 holiday weekend, often a busy period for road travel.

"Key uncertainty now remains on demand recovery," Harry Tchilinguirian, head of commodity research at BNP Paribas, said. – Reuters

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