* Surging COVID-19 cases dent fuel demand outlook
* U.S. economy contracts at steepest rate since Great
Depression
(Adds details, updates prices)
By Ahmad Ghaddar
LONDON, July 30 (Reuters) - Oil prices fell by around 4% on
Thursday, as surging coronavirus infections around the world
threatened to jeopardise a recovery in fuel demand just as major
oil producers are set to raise output.
U.S. West Texas Intermediate (WTI) crude futures were
down $1.52, or 3.7%, at $39.75 a barrel at 1401 GMT.
The most-active Brent crude contract for October
fell $1.35, or 3.1%, to $42.74 a barrel, while September Brent
, which expires on Friday, fell $1.34 to $42.41 a barrel.
Both benchmark contracts had risen on Wednesday after the
U.S. Energy Information Administration (EIA) reported the
largest one-week fall in crude stocks since December.
In a sign of the devastating impact of the coronavirus on
the United States, the world's biggest oil consumer, the
country's economy contracted at its steepest pace since the
Great Depression in the second quarter.
U.S. gross domestic product collapsed at a 32.9% annualised
rate, the deepest decline in output since the government started
keeping records in 1947, the Commerce Department said on
Thursday.
Deaths from COVID-19 have now topped 150,000 in the United
States, while Brazil, with the world's second-worst outbreak,
set daily records of confirmed cases and deaths. New infections
in Australia hit a record on Thursday.
"The recent resurgence of the coronavirus is an ominous sign
that the upside is limited in the immediate future," Tamas Varga
of oil brokerage PVM said.
The potential threat to a recovery in oil demand comes as
the Organization of the Petroleum Exporting Countries (OPEC) and
its allies, together known as OPEC+, are set to step up output
in August, adding about 1.5 million barrels per day to global
supply.
"The easing OPEC+ supply restrictions combined with the
return of some U.S. production may test the resilience of market
sentiment in the coming weeks," Stephen Innes, chief global
market strategist at AxiCorp said.
Total and Royal Dutch Shell reported
small profits in the second quarter as their oil trading
businesses shielded them from the full force of the
pandemic-induced demand loss.
(Additional reporting by Sonali Paul in Melbourne and Koustav
Samanta in Singapore. Editing by Jane Merriman and Edmund Blair)
