Commodity Market: US Crude Oil retreats as virus-related lockdown concerns outweigh signs of recovery in gasoline demand

Futures on US West Texas Intermediate Crude Oil traded lower on Thursday, paring gains from the previous day, since concerns over possible coronavirus lockdown re-imposition in the United States offset signs of recovery in US demand for gasoline.

“The market’s struggling to get strong conviction to the upside at the current point in time,” Lachlan Shaw, head of commodity research at National Australia Bank, said. “There’s mixed evidence on demand.”

Oil received support on Wednesday after the latest report by the US Energy Information Administration (EIA) showed a much sharper drop in gasoline stocks than anticipated during the week ended July 3rd, by 4.839 million barrels. That followed a 1.199-million-barrel surge in the preceding week. The data also showed demand had risen to 8.8 million barrels per day, or the strongest since the week ended March 20th.

Still, according to Shaw, while demand for gasoline on the US East Coast is showing signs of recovery, demand in regions where lockdowns are being reimposed has become more subdued.

Yesterday the United States reported over 58,000 new coronavirus infections, or the largest single-day increase since the start of the pandemic. 42 out of 50 US states reported a surge in new cases, which added to prospects of lockdowns being reinstated, an occurrence that could curb any observed fuel demand recovery.

As of 9:10 GMT on Thursday WTI Crude Oil Futures were edging down 0.24% to trade at $40.76 per barrel, while moving within a daily range of $40.63-$40.97. WTI Crude Futures have gained 1.33% so far this week, following a 5.38% gain in the preceding week.

Brent Oil Futures were edging down 0.12% on the day to trade at $43.26 per barrel, while moving within a daily range of $43.04-$43.34. Brent Oil Futures have risen 1.36% so far this week, following a 5.06% surge in the prior week.

Daily Pivot Levels (traditional method of calculation) – WTI Crude Oil Futures

Central Pivot – $40.75
R1 – $41.17
R2 – $41.49
R3 – $41.91
R4 – $42.33

S1 – $40.43
S2 – $40.01
S3 – $39.69
S4 – $39.37

Daily Pivot Levels (traditional method of calculation) – Brent Oil Futures

Central Pivot – $43.17
R1 – $43.58
R2 – $43.84
R3 – $44.25
R4 – $44.65

S1 – $42.91
S2 – $42.50
S3 – $42.24
S4 – $41.97