Oil prices fell on Thursday on demand concerns driven by cautious views from OPEC+ producers and the US Federal Reserve regarding economic recovery from the coronavirus pandemic.
Brent crude LCOc1 was down $0.48, or 1%, at $44.89 a barrel at 0933 GMT and US West Texas Intermediate (WTI) CLc1 fell $0.34, or 0.8%, at $42.59 a barrel.
“The surge in Covid-19 infections over the summer has muted the recovery and anyone still believing in a V-shaped recovery needs to do some reassessment,” said Hussein Sayed, Chief Market Strategist at FXTM.
A firmer US dollar also put pressure on oil prices, analysts said, leaving them stuck in their narrow trading range of recent weeks.
Oil prices have been range bound since mid-June, with Brent trading between $40 and $46 per barrel and WTI between $37 and $43.
The Organisation of the Petroleum Exporting Countries (OPEC) and its allies, known an OPEC+, said on Wednesday that the pace of oil market recovery appeared to be slower than anticipated with growing risks of a prolonged second wave of the pandemic.
The group pressed oil nations pumping above output targets to cut more in August-September due to concerns about the strength of recovery in demand.
Prices were also pressured after several US Fed members said additional monetary policy easing may be needed because a rebound in employment was already slowing.
“All roads in global and regional economies lead to the containment of the virus and the end of these roads is not in sight yet,” said oil broker PVM’s Tamas Varga.
The US Energy Information Administration said on Wednesday that US fuel demand fell by more than two million barrels per day (bpd) to 17.2 million bpd in terms of product supplied.
Overall fuel demand in the last four weeks is down 14% from year-ago levels. As the summer driving season comes to a close, fuel demand tends to decline.
However, stockpiles of crude in the United States fell for a fourth straight week, even as net imports rose, the EIA said.