Oil steady as European recovery support countered by Indian virus surge

Oil prices were broadly steady on Friday with support from a European economic recovery countered by concerns about the record surge of coronavirus infections in India.

Brent crude dipped 2 cents, or less than 0.1 per cent, to $65.38 a barrel at 1335 GMT, while US West Texas Intermediate (WTI) US crude gained 6 cents, or 0.1 per cent, to $61.49 a barrel.

Eurozone Purchasing Managers’ Index (PMI) data for April showed a stronger than expected recovery and more European states began easing coronavirus lockdowns. France said schools would reopen on Monday.

“Stronger PMIs across Europe, a weaker US dollar, and some European countries planning to ease some of their restrictions are slightly supporting oil prices,” UBS oil analyst Giovanni Staunovo said.

“Oil demand concerns in India due to rising COVID cases are capping the upside.”

Both benchmark crudes were headed for a weekly loss of more than 2 per cent due to the resurgence of infections in India and Japan, respectively the world’s third and fourth-largest oil importers.

Several countries, including Australia, Britain, Canada, and the United Arab Emirates have barred or cut flights from India.

Japan declared new lockdowns in Tokyo, Osaka and two other prefectures on Friday.

Adding to the more upbeat outlook in European and US economic data, the number of Americans filing new claims for unemployment benefits fell to a 13-month low last week.

“The US oil demand outlook continues to go from strength to strength. Latest weekly jobless claims brought more good macro news for the world’s biggest economy,” said Stephen Brennock of oil broker PVM.

US refiner Valero said demand for gasoline and diesel were at 93 per cent and 100 per cent of pre-pandemic levels.