Oil futures remained under pressure Thursday, though prices held ground at their lowest levels in more than a week, as a continued surge in COVID-19 cases in Asia in particular underlined concerns about the global economy and energy demand.
The market has realized that a “global come-back in oil demand cannot come without a come-back of the world’s largest economies,” said Bjornar Tonhaugen, head of oil markets at Rystad Energy.
“It is not enough to see the U.S. and China dealing well with the pandemic,” he said in a note Thursday. “For oil prices to build up again, it will take global signs of recovery, and such indications are now scarce in key Asian countries.”
West Texas Intermediate crude for June delivery
fell 29 cents, or 0.5%, at $61.06 a barrel on the New York Mercantile Exchange. June Brent crude
the global benchmark, was off 24 cents, or 0.4%, at $65.08 a barrel on ICE Futures Europe.
Prices for both crude benchmark on Wednesday saw their lowest front-month contract settlements since April 13.
“Concerns around a surge of new COVID-19 cases in India remain a key downside risk, both for crude demand and for a broader global economic recovery,” said Robbie Fraser, global research & analytics manager at Schneider Electric, in a daily note.
India on Thursday saw 314,835 new COVID-19 cases, marking a record daily tally. Sharply rising case numbers in Japan are also a concern, with officials weighing a state of emergency for Osaka and Tokyo. India and Japan are among the world’s largest oil consumers and importers, said Eugen Weinberg, analyst at Commerzbank, in a note.
The demand picture in the U.S., by contrast, appears strong, he noted. While data released Wednesday showed a rise in U.S. crude inventories, gasoline demand increased to 9.1 million barrels a day — the highest since the peaking during last year’s summer driving season, Weinberg said.
Natural-gas futures traded lower ahead of a weekly update on supplies from the Energy Information Administration due shortly.
On average, analysts polled by S&P Global Platts expect the data to show a climb of 37 billion cubic feet for the week ended April 16. A rise of that size would be equal to the five-year average climb, the survey said.
Ahead of the data, May natural gas
fell 0.5% to $2.68 per million British thermal units.