Oil steady as rising India COVID-19 cases weigh

Bozorgmehr Sharafedin
·2 min read
FILE PHOTO: Pump jacks operate at sunset in Midland

By Bozorgmehr Sharafedin

LONDON (Reuters) - Oil prices were broadly steady on Friday with support from a European economic recovery countered by concerns as coronavirus infections in India surged to record levels.

Brent crude dipped 4 cents, or 0.1%, to $65.36 a barrel at 1220 GMT, while U.S. West Texas Intermediate (WTI) U.S. crude gained 7 cents, or 0.1%, to $61.50 a barrel.

Euro zone Purchasing Managers' Index (PMI) data for April showed a stronger than expected recovery and more European states began easing coronavirus lockdowns. France said schools would reopen on Monday.

"Stronger PMIs across Europe, a weaker U.S. dollar, and some European countries planning to ease some of their restrictions are slightly supporting oil prices," UBS oil analyst Giovanni Staunovo said.

"Oil demand concerns in India due to rising COVID cases are capping the upside."

Both benchmark crudes were headed for a weekly loss of more than 2% due to the resurgence of infections in India and Japan, respectively the world's third and fourth largest oil importers.

Several countries, including Australia, Britain, Canada, and the United Arab Emirates have barred or cut flights from India.

Japan declared new lockdowns in Tokyo, Osaka and two other prefectures on Friday.

Adding to the more upbeat outlook in European and U.S. economic data, the number of Americans filing new claims for unemployment benefits fell to a 13-month low last week.

"The U.S. oil demand outlook continues to go from strength to strength. Latest weekly jobless claims brought more good macro news for the world’s biggest economy," said Stephen Brennock of oil broker PVM.

U.S. refiner Valero said demand for gasoline and diesel were at 93% and 100% of pre-pandemic levels.

(Reporting by Bozorgmehr Sharafedin in London, additional reporting by Sonali Paul in Melbourne and Koustav Samanta in Singapore; Editing by Jason Neely and Edmund Blair)