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Oil slides 1%, but still posts fifth week of gains in last six - CNBC

Two workers stand before the backdrop of an oil pump, while silhouetted against the sunset.
David Jones | Getty Images

Oil prices dropped on Friday as the economic recovery worldwide runs into stumbling blocks due to renewed coronavirus lockdowns, even as major global crude producers limit crude supply.

The euro zone's economic recovery from its deepest downturn on record has stalled this month as pent-up demand unleashed by the easing of lockdowns in July dwindled, a survey showed.

By contrast, U.S. housing and manufacturing survey data came in better than expected, offsetting a surprising increase in jobless claims on Thursday.

Brent crude futures were down 84 cents, or 1.9%, at $44.06 a barrel, heading for a nearly 2% weekly fall.

West Texas Intermediate crude futures settled 48 cents, or 1.12%, lower at $42.34 per barrel.

"Right now, the concerns about demand and the uptick in COVID cases seems to be the big reason why we're weaker," said Phil Flynn, senior analyst at Price Futures Group in Chicago.

India's crude oil imports fell in July to their lowest level since March 2010, while U.S. motorists drove 13% fewer miles in June than a year earlier, according the U.S. Department of Transportation.

Libya's national oil company said it could restart oil exports after the North African country's internationally recognized government in Tripoli announced a ceasefire, putting further pressure on oil prices.

"This is a market that can't afford to absorb any additional barrels," said John Kilduff, partner at Again Capital LLC in New York.

OPEC+, which consists of the Organization of the Petroleum Exporting Countries and allies, including Russia, was focused on ensuring members that had overproduced against their commitments would reduce output.

An internal report showed the group wanted oversupply between May and July compensated for with cuts this month and next, Reuters reported.

It also showed OPEC+ expects oil demand in 2020 to fall by 9.1 million barrels per day, and by as much as 11.2 million bpd if there is a resurgence of coronavirus infections.

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Oil slides 1%, but still posts fifth week of gains in last six - CNBC
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