Oil stuck between two fires.. Demand concerns and a decline in stocks

Oil prices fell today, Thursday, as they came under pressure due to fears that the US economic recovery is slowing as the coronavirus continues to spread.

Meanwhile, a new wave of Covid-19 cases has led to the reimposition of travel restrictions in several countries.

Concern about demand and the economic outlook due to the new increase in coronavirus infections has pushed the dollar up, as investors switched to safer assets, adding to pressure on oil prices.

The rising dollar reduces the attractiveness of oil, which is denominated in the US currency, to global buyers.

Brent crude is declining

By 06:50 GMT, US WTI futures were down 37 cents, or 0.9%, to $ 39.56 a barrel, while Brent crude futures were down 34 cents, or 0.8%, to $ 41.43 a barrel.

The two benchmarks rose slightly on Wednesday after government data showed that stocks of crude and fuel in the United States fell last week.

Gasoline stocks fell more than expected, dropping 4 million barrels, and distillates recorded a surprise drop of 3.4 million barrels.

The demand for fuel is weak

But demand for fuel in the United States has remained weak, as the pandemic restricts travel. Government data show that the average demand for gasoline in four weeks amounted to 8.5 million barrels per day last week, 9% less than its level a year ago.

Prices fell after data showed that business activity slowed in the United States in September, and officials at the Federal Reserve (US Central Bank) hinted at concerns about a faltering recovery and Britain and Germany imposed restrictions to curb new infections with the coronavirus, all of which are factors affecting the outlook for demand on fuel.

On the supply side, the market remains concerned about resuming exports from Libya although it is unclear how quickly volumes can increase.

Meanwhile, the state-run Iraqi News Agency quoted Iraqi Oil Minister Ihsan Abdul-Jabbar as saying today, Thursday, that he expects to reach an agreement with OPEC+ to increase his country's exports of crude oil.