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UPDATE 4-Oil holds above $44, heads for weekly drop on demand concerns

Fri, 4th Sep 2020 04:46

* Crude on track for biggest weekly drop since June

* U.S. gasoline demand drops

* Singapore distillate inventories soar

* Coming up: U.S. August jobs figures, 1230 GMT
(Updates prices, adds quote)

By Alex Lawler

LONDON, Sept 4 (Reuters) - Oil held above $44 a barrel on
Friday and was on course for its biggest weekly decline since
June as weak demand figures added to concern over a slow
recovery from the COVID-19 pandemic.

A U.S. government report showed that domestic gasoline
demand fell in the latest week. Middle distillates
inventories at Asia's oil hub Singapore have soared above a
nine-year high, official data showed..

Brent crude, the international benchmark, was up 28
cents, or 0.6%, at $44.35 by 0940 GMT, heading for a 1.6% drop
this week. U.S. West Texas Intermediate (WTI) rose 18
cents, or 0.5%, to $41.55, set for its first weekly drop in
five.

"Despite the price gains today, which somehow smoothed the
losses of the week, the bigger market picture is overall bearish
sentiment that kicked off with lower gasoline demand reports on
Wednesday," said Paola Rodriguez-Masiu, analyst at Rystad
Energy.

In focus on Friday will be U.S. payrolls figures at 1230
GMT, which could be a selling trigger if an expected slowdown in
hiring is steeper than forecast. The unemployment rate is
expected to fall to 9.8% from 10.2%.

"Demand concerns are firmly front and centre of traders'
minds," said Stephen Brennock of oil broker PVM. "Today's
non-farm U.S. payroll report will be closely watched and a
disappointing number could be the next bearish catalyst."

Oil has recovered since April, when Brent slumped to a
21-year low below $16 and U.S. crude briefly went into negative
territory.

A record supply cut since May by the Organization of the
Petroleum Exporting Countries (OPEC) and its allies, a group
known as OPEC+, has supported prices.

OPEC began in August to ease the scale of the cuts, raising
output by almost 1 million barrels per day according to a
Reuters survey.
(Additional reporting by Florence Tan and Koustav Samanta
Editing by Mark Potter and David Goodman)

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