Oil futures pulled back Friday, with weakness tied to worries over the global economic outlook, but remained on track for weekly and monthly gains.
“Today concerns over rising COVID cases are raising their head again,” said Sophie Griffiths, market analyst at Oanda, in a note. “The COVID crisis in India, the world’s third-largest importer of oil, continues to escalate and, in fact, shows no signs of abating.”
India reported 386,452 new cases in a single day, breaking a record it set a day ago, according to the Indian Health Ministry, and 3,498 deaths.
West Texas Intermediate crude for June delivery
fell $1.23, or 1.9%, to $63.78 a barrel on the New York Mercantile Exchange. June Brent crude
fell $1.08, or 1.6%, to $67.48 a barrel on ICE Futures Europe. July Brent
the most actively traded contract, was down $1.08, or 1.6%, at $66.97 a barrel.
Based on the most actively traded contracts, WTI was on track for a 2.6% weekly rise and an April gain of around 7.8%. Brent was up 1.2% for the week and 6.7% for the month.
China’s official manufacturing purchasing managers index declined to 51.1 in April from 51.9 in March, according to data released Friday by the National Bureau of Statistics. The reading was much lower than the 51.6 median forecast expected by economists polled by The Wall Street Journal, but remained above the 50 level, marking an expansion in activity.
Data showed the eurozone economy shrank at the beginning of 2021 for the second consecutive quarter, entering its second technical recession in a year.
That said, strong economic data out of the U.S. and expectations for strengthening activity around the world in coming months has helped crude rally in April
“With the U.S. economy firing up on all cylinders, the oil demand outlook is strengthening. Oil markets have been focused on the rising demand story, which it believes will offset any OPEC+ agreed rise in output from May,” Griffiths said.