Oil heads for weekly loss on global demand concerns

Oil prices continued to drop as the US market opened on Friday, to deepen losses for the second straight daily loss and hit a week low, while heading for the second weekly loss in 3 weeks, on global demand concerns, after the coronavirus-linked restrictions were renewed in the US and other countries. 

US crude fell 2.6% to the lowest level since June 29 at $38.56 a barrel, after a session-high of $39.78, while Brent shed 2.4% to $41.34 a barrel from a high of $42.54. 

US crude lost 3.1% yesterday, and Brent fell 2.3%, posting the second loss in 3 days, on US oversupply concerns. 

Oil prices have lost around 3% so far during this week, to head for the second weekly loss in 3 weeks, on demand concerns and an unexpected build in US crude inventories.

Reuters reported that the US coronavirus infections saw a spike by more than 60,500 new cases of on Thursday, which is a new daily record.

Consequently, this forced the authorities in many US cities and states to delay reopening many economic activities.

Government authorities in Australia locked down the second most populous city, Melbourne, after a surge in coronavirus infections.

The Australian government will also decide today on reducing the number of citizens allowed to return from abroad, especially from the US, Brazil and India.

This renewed concerns about the global demand, which saw a relative recovery recently, after the end of the coronavirus lockdown measures in many Asian and European countries.

The US Energy Information Administration (EIA) showed yesterday that the US crude inventories rose 5.7 million barrels during the week ending July 3, beating forecasts of a drop by 3.2 million barrels.

The total US inventories up to 539 million barrels, 16% over the five-year average and almost touching the record high of 541 million barrels. 

US output steadied unchanged last week at 11.00 million bpd, as the US still the world's top producer.