July 6, 2020 / 1:19 AM / a month ago

Oil steady as hopeful economic data face spike in virus cases

NEW YORK (Reuters) - Oil futures ended largely steady on Monday as positive economic data supported prices, while a spike in coronavirus cases in the United States that could curb fuel demand pressured prices.

FILE PHOTO: An oil pump jack pumps oil in a field near Calgary, Alberta, July 21, 2014. Pump jacks are used to pump crude oil out of the ground after an oil well has been drilled. REUTERS/Todd Korol

Brent crude LCOc1 settled at $43.10 a barrel, up 30 cents. U.S. West Texas Intermediate (WTI) crude CLc1 settled at $40.63 a barrel, down 2 cents.

“The competing forces in the oil market right now are the reopening of economies around the world, increasing oil demand, countered by concerns about economies closing around the world due to a resurgence in the number of virus cases,” Andy Lipow, president of consultants Lipow Oil Associates.

In the first five days of July, 16 states reported record increases in new cases of COVID-19, which has infected nearly 3 million Americans and killed more than 130,000, according to a Reuters tally.

U.S. services industry activity rebounded sharply in June, almost returning to its pre-COVID-19 pandemic levels, while China’s economy was recovering and its capital markets attracting money, setting the scene for a healthy bull market, the official China Securities Journal said in an editorial.

German data, however, showed that the recovery from COVID-19 will be slow and painful. Germany’s industrial orders rebounded moderately in May and a fifth of firms in Europe’s biggest economy said in a survey published on Monday they feared insolvency.

Graphic: World demand and supply for oil - here

The implied volatility for Brent crude LCOATMIV has dropped to its lowest since prices started collapsing in March as markets remain focused on tightening supplies.

Production by the Organization of the Petroleum Exporting Countries (OPEC) has fallen to its lowest in decades.

OPEC and other producers including Russia, collectively known as OPEC+, have agreed to lower output by a record 9.7 million barrels per day (bpd) for a third month in July.

Saudi Arabia’s state oil producer Aramco has increased official selling prices (OSPs) for its crude to Asia by $1 a barrel in August, and raised the OSPs for almost all grades to Europe and the United States.

Additional reporting by Bozorgmehr Sharafedin in London, Florence Tan in Singapore and Jessica Resnick-Ault in New York; Editing by Marguerita Choy and Jan Harvey

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