Oil headed for just its second weekly decline since late April as a surge in coronavirus cases in the U.S. clouded the demand outlook, but the pessimism was tempered by signs Russia is determined to curb output.
Futures in New York rose toward $39 a barrel on Friday, but are still down by about 2% for the week. Texas — the center of the American oil industry — halted its re-opening as infections jumped and Houston’s intensive-care wards reached capacity.
Cases across the U.S. rose by almost 40,000. Russian exports of the flagship Urals grade from its three main western ports will plunge by 40% next month, according to loading plans seen by Bloomberg.
The steep reductions underscore Moscow and the OPEC+ alliance’s commitment to eliminate the oil glut that was built up earlier in year.
While crude has rebounded rapidly from its plunge below zero in April, the gains have slowed this month. Infections continue to surge in many parts of the world, demand still has a long way to get back to pre-virus levels and many refiners are struggling with low margins. There’s also a risk that U.S. shale producers start bringing back output.