Oil prices declined yesterday, adding to the losses of the previous session, due to fears of a slowdown in the recovery of fuel demand amid the return of Corona virus infections to the rise, and the talks stalled on a new stimulus agreement in the United States.
US West Texas Intermediate crude futures were down 17 cents, equivalent to 0.41% to $ 41.78 a barrel, while Brent crude fell 17 cents, or 0.38%, to $ 44.92.
But they are still poised for weekly gains of about 4%, which will be the largest for the two benchmarks since the week ending on the third of July.
Analysts said that the resurgence of Corona virus infections remains the central issue for the oil markets, as this will determine how quickly fuel demand will recover. Statistics show that injuries have increased in a number of US states, such as Colorado, Ohio and Virginia.
Prices are also suffering under the weight of the weak current market for crude and refining margins in most regions.
"It really comes down to the demand situation," said Stephen Ince, market strategist at AxiCorp. He continued: «We are trying to collect the diaspora of our thoughts about the shape of the curve (Corona virus). Will the stabilization of the injury curve in the United States overwhelm the booms around the world? ».
Analysts are also watching the stalled talks between the White House and Democrats about a new stimulus package to counter the fallout from the Corona virus, as Democrats have said that President Donald Trump may have to issue executive orders if he is not willing to continue negotiating.
"The package to mitigate the repercussions of the virus remains the last hope to boost demand (for fuel), in light of the US travel season coming to an end," ANZ Market Research said in a note. In addition, China's imports of crude jumped 25% in July compared to a year ago, due to the arrival of huge purchases that took place when prices collapsed in April, and the customs clearance of some shipments that were delayed in the ports during June.
"Massive purchases" led to a 25% increase in Chinese oil imports in July.