Oil falls on renewed global growth fears, but remains on track for monthly gains

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Oil futures fell on Friday, with the weakness linked to concerns about the global economic outlook, but prices remained on the path of weekly and monthly gains. “Today, concerns about increasing COVID cases are emerging again,” Sophie Griffiths, a market analyst at Oanda, said in a note. “The COVID crisis in India, the world’s third-largest oil importer, 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 Ministry of Health, and 3,498 deaths. However, “global oil demand is poised for a massive boost in the coming months that will offset the losses in demand from India and the recovery in supply from OPEC, and that is why prices have been rising mainly for the week, “said Bjornar Tonhaugen, director of oil markets at Rystad Energy. “American consumers are one of the main reasons markets remain optimistic,” he said in a daily commentary. “Chinese and US locomotives are far outpacing the size of India’s slowdown.” In the worst case, India may lose half of its 4.8 million barrels per day of oil consumption temporarily and “see a U-shaped demand recovery longer than the impact of loss of demand of 1 , 0 million bpd that we project for May, “said Tonhaugen. “But the recovery in demand for oil from China and the US in the next 3 months alone will be above 1 million bpd and it will be the net loss of demand from India.” West Texas Intermediate crude for June delivery CL00, -2.28% CLM21, -2.28% fell $ 1.56, or 2.4%, to $ 63.45 a barrel on the New York Mercantile Exchange. Based on the first month’s contracts, WTI was on track for a 2% weekly increase and an April gain of around 7.1%. Before expiration at the end of the session, the June Brent crude BRNM21 contract, -1.84% fell $ 1.27, or 1.9%, to $ 67.29 a barrel on ICE Futures Europe. It traded 1.7% in the week and 7.1% in the month. July’s Brent BRN00, -1.98% BRNN21, -1.98%, the most active contract and close to the first month, fell 1.41 dollars, or 2.1%, to 66.64 dollars a barrel. China’s official manufacturing purchasing managers index fell 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 median forecast of 51.6 expected by economists surveyed by The Wall Street Journal, but remained above the 50 level, marking an expansion in activity. The data showed that the eurozone economy contracted in early 2021 for the second consecutive quarter, entering its second technical recession in a year. That said, strong US economic data, including a 4.2% increase in consumer spending for March, and expectations of strengthening activity around the world in the coming months have helped crude to recover in April. Read: ‘Summer Struggle’ for Gasoline on Draft Amid Tanker Truck Driver Shortage “With the US economy in full steam, the outlook for oil demand is strengthening. Oil markets have focused on the story of growing demand, which they believe will offset any agreed OPEC + increase in production starting in May, ”said Oanda’s Griffiths. Oil products prices on Nymex also fell on Friday, but were primed for monthly gains. May gasoline RBK21, -1.83% fell 1.8% to $ 2.06 a gallon, trading 5.2% higher in the month, while May heating oil HOK21, -2, 28% was down 2.3% to $ 1.92 a gallon, up 8.3% for the month. May contracts expire at the end of the day’s session. June 21 NGM natural gas, + 0.96% traded at $ 2.94 per million British thermal units, a 0.9% increase in Friday transactions, set for a monthly increase of around 10% .