Oil Futures Settle Lower As Virus Fears Dim Energy Demand Hopes

Crude oil futures settled lower on Friday, weighed down by concerns over energy demand outlook in the wake of sharp spikes in new coronavirus infections in several states in the U.S.

With new cases rising sharply, raising possibilities of another lockdown where businesses have already reopened, and a delay in reopening in certain places, it is feared that demand for energy may fall in the near term or may not pick up as expected.

West Texas Intermediate Crude oil futures for August ended down $0.23 or about 0.6% at $38.49 a barrel.

Brent crude futures were lower by $0.14 at $40.90 a barrel.

WTI crude oil futures shed about 3.4% in the week.

According to the U.S-based Johns Hopkins University, over 9.5 million people have been infected globally due to coronavirus, while the global death toll from the virus topped 484,000.

The United States has the highest case count in the world, with over 2.4 million, including 122,370 fatalities and 656,000 plus recoveries.

The highest single-day tally since the pandemic hit the country in January was partly driven by spikes in California, Florida, Texas, Alabama, Missouri and Nevada. Many of these states reported their highest daily toll.

As infections and hospitalizations go beyond control in the state, Texas Governor Greg Abbott announced that the next phase of reopening will be delayed.

The U.S. Centers of Disease Control and Prevention (CDC) warned that the number of infected people in the U.S. is most likely 10 times higher than what was officially reported.

Meanwhile, data released by Baker Hughes showed the US drilling rig count fell by 1 unit to 265 during the week ended June 26. The report shows an overall decrease of 702 units from year-ago levels.

Offshore units were unchanged this week at 11 rigs. A total of 254 rigs were drilling on land, down 1 unit from last week. The number of rigs drilling in inland waters was unchanged at 0.

The report also said that rigs targeting oil fell 1 unit to 188, down 605 from the 793 rigs drilling for oil this week a year ago. Gas-targeted rigs were unchanged at 75.

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