By Justice Derefaka
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.
“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.
Trading was muted on Monday and differentials for West African grades held steady or eased somewhat as high crude oil futures prices corresponded with slightly weaker physical oil prices.
* An improvement to middle distillate margins has made for swifter sales this month, but main buyer China has sharply reduced purchases due to poor margins and port congestions.
* Traders said the Brent futures price above $40 a barrel was rendering the price of physical crude too expensive and had led to a reduction of both East Asian and European buying.
* Nigerian lighter grades had also yet to gain in price, with Bonny Light and Qua Iboe still last being offered at around between 50 cents a dollar above dated Brent.
Prices are as follows:
(1)Dated Brent =$43.425/ bbl (0.28)
(2)Bonny Light =$43.635/bbl (0.575)
(3)QuaIboe =$43.785 /bbl (0.575)
(4)Forcados =$43.785 /bbl (0.575)
Stay Safe and have a wonderful week.