By Justice Derefaka
Oil prices settled lower on Friday as new coronavirus cases spiked in the United States and China, and on growing concerns about rising U.S. output ticking up while crude stockpiles sat at record highs.
Earlier gains, supported by optimism over rising road traffic boosting fuel demand, were erased in U.S. trading on fears that spiking COVID-19 infections in large gasoline-consuming U.S. states could stall the demand recovery. Cases have risen sharply in California, Texas and Florida, the three most populous U.S. states.
Friday morning, Texas Governor Greg Abbott reversed the state’s reopening plan, ordering most bars to close due to the surge in cases.
That could undermine the steady increase in refining output, with U.S. refiners now operating at nearly 75% of their capacity, according to government data.
“Employers are delaying the return of their employees back to the office and that will impact the return of gasoline demand,” said Andrew Lipow, president of Lipow Oil Associates.
Nigerian crude differentials were steady to higher on Friday, while Angolan cargoes for August loading appeared to be finding buyers despite narrow refining margins.
* Bonny Light and Qua Iboe were last heard to be offered at dated Brent plus $1.00 for July-loading cargoes, the higher end of the range heard earlier this week.
* Sellers have yet to offer spot August-loading cargoes.
* Less than half of Angola’s 38 August-loading cargoes are still available for sale, a trader said. That suggests reasonably solid demand, even though some large customers have yet to buy any
Prices are as follows:
(1)Dated Brent =$40.77/ bbl (-0.24)
(2)Bonny Light =$40.36/bbl (-0.23)
(3)QuaIboe =$40.51 /bbl (-0.23)
(4)Forcados =$40.66 /bbl (-0.23)
Stay Safe and have a wonderful week ahead