Oil falls below $43 on virus fears

Oil fell below $43 a barrel on Friday as a resurgence of coronavirus cases raised concern that fuel demand growth could stall, although crude was still headed for a weekly gain on lower supply and wider signs of economic recovery. The United States reported more than 55,000 new coronavirus cases on Thursday, a new daily global record for the pandemic. The rise in cases suggested U.S. jobs growth, which jumped in June, could suffer a setback. Brent crude was down 52 cents, or 1.2%, at $42.62 a barrel as of 0805 GMT, and U.S. West Texas Intermediate (WTI) crude fell 50 cents, or 1.2%, to $40.15.

Brent is still heading for a weekly gain of more than 5%. Signs of economic recovery, and a drop in supply after a record supply cut by the Organization of the Petroleum Exporting Countries and allies, known as OPEC+, have helped Brent more than double from a 21-year low below reached in April.

Boosting recovery hopes, a private survey showed on Friday that China’s services sector expanded at the fastest pace in over a decade in June. OPEC oil production fell to its lowest in decades in June and Russian production has dropped near its OPEC+ target. The bankruptcy filing of U.S. shale pioneer Chesapeake Energy also supported prices by raising expectations production will decline, JBC Energy said in a report.

Oil falls below on virus fears, still heads for weekly gain, Reuters, Jul 3