UPDATE 7-Oil falls below $43/bbl on virus fears, still heads for weekly gain

UPDATE 7-Oil falls below $43/bbl on virus fears, still heads for weekly gain

Reuters  | Jul 04, 2020 00:20

UPDATE 7-Oil falls below $43/bbl on virus fears, still heads for weekly gain

* Brent heading for 4% weekly gain
* U.S. reports 55,000 COVID-19 cases in single day
* OPEC, Russia oil output cuts support prices
* China's services sector grows at rapid pace in June

(Updates prices)
By Alex Lawler
LONDON, July 3 (Reuters) - 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. "If this trend continues, oil demand in the region is at
risk," said Louise Dickson of Rystad Energy.
Brent crude LCOc1 was down 38 cents, or 0.9%, at $42.76 a
barrel by 12:03 p.m. EDT (1603 GMT), and U.S. West Texas
Intermediate (WTI) crude CLc1 fell 44 cents, or 1.1%, to
$40.21.
U.S. trade was thinned by the Independence Day holiday.
"The fragile U.S. economic rebound is at risk of being
undone by the latest surge in new infections," said Stephen
Brennock of oil broker PVM.
Both benchmarks rose more than 2% on Thursday, buoyed by
strong U.S. June jobs figures and a drop in U.S. crude
inventories. EIA/S Brent is still on track for a weekly gain
of 4%.
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 $16 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
OPEC/O and Russian production has dropped to 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.
Gasoline demand will be closely watched as the United States
heads into the July 4 holiday weekend.

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