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Oil edges higher as traders weigh supply against virus impact
OIL edged higher in London to trade above US$43 a barrel as investors weighed tightening crude supplies and robust US economic data against surging coronavirus infections.
Brent rose 1.1 per cent after climbing 4.3 per cent last week. Libya's oil exports are expected to fall this month as forces opposed to the government continue to block shipments, while data last week showed the American labour market rebounded in June. However, a surge in US virus cases has pushed global infections above 11.3 million, prompting concerns the recovery may be derailed.
While Brent oil has doubled since April as Opec+ reduced output to tackle a glut, surging infections across the globe has increased fears of a prolonged hit to demand and kept a lid on further gains. Opec and its allies are yet to decide on whether to extend their full production cutbacks after July, Russian Energy Minister Alexander Novak said last week.
"Oil prices indicate the overall indecisiveness that the market is facing," said Michael McCarthy, chief market strategist at CMC Markets Asia Pacific in Sydney, adding that futures have probably peaked for now. "There is increasing concern over demand with the global high infection rates and the number of countries in the world looking at reintroducing lockdown measures."
Libya will export two oil cargoes totalling 1.2 million barrels in July - a third less than in June. The Bouri and Farwah terminals will each ship one cargo of 600,000 barrels, according to an initial loading programme seen by Bloomberg. That compares with 1.8 million barrels shipped for all of June. BLOOMBERG