WTI crude oil prices are weakening early on Friday, continuing their decline from the previous session as markets focus on oil demand faltering in the wake of the recent resurgence in fresh coronavirus infections across the world. At the time of writing, WTI crude oil is trading at around $41.92 per barrel.
US oil lost around 0.2% of its value on Thursday as fears mounted among traders that the latest spike in cases and resulting lockdowns could send oil demand even lower, before it had a chance to recover from the first round of lockdowns at all. Despite the weakness in the previous session, so far crude oil is on track to post a gain for the third consecutive week, supported by promising reports about possible vaccines against COVID-19.
In the US alone, the number of hospitalizations due to COVID-19 have risen by almost 50% over the past couple of weeks alone. Several states have announced restrictions to contain the spread of the pandemic again, a factor that is likely to depress oil demand in the world’s largest energy consumer.
WTI crude oil, however, received some support from possible progress on the next round of fiscal stimulus measures in the US. In addition, traders are hoping that OPEC and its allies could announce an extension of their deeper supply cuts beyond the end of this year to offset further weakness in oil demand.