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UPDATE 3-Oil prices slide as virus surge weighs on demand outlook

Thu, 30th Jul 2020 05:11

* U.S. crude stocks post biggest weekly drop since Dec

* U.S. gasoline, distillate inventories post surprise builds

* Surging COVID-19 cases dent fuel demand outlook
(Updates, adds comment, changes dateline to LONDON)

By Ahmad Ghaddar

LONDON, July 30 (Reuters) - Oil prices fell 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.

The most-active Brent crude contract for October
fell 51 cents, or 1.2%, to $43.58 a barrel at 0907 GMT. The
September Brent contract, which is expiring on Friday,
fell 56 cents to $43.19 a barrel.

U.S. West Texas Intermediate (WTI) crude futures were
down 60 cents, or 1.5%, at $40.67 a barrel.

Both benchmark contracts rose on Wednesday after the U.S.
Energy Information Administration (EIA) reported the largest
one-week fall in crude stocks since December.

"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.

Deaths from COVID-19 topped 150,000 in the United States on
Wednesday, 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 potential hit to the demand rebound comes just 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

"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)

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