By Geoffrey Smith
Investing.com -- Crude oil prices were broadly stable at lower levels early Thursday in New York after the latest weekly U.S. jobless figures continued to show a slow and uncertain recovery in the labor market, while rising concern about a new wave of the coronavirus weighed on the outlook for demand.
By 9:15 AM ET (1315 GMT), U.S. crude futures were down 0.5% at $37.83 a barrel, having now fallen some 7% from the three-month high they posted earlier in the week on hopes of a rebalancing of supply and demand in the physical crude market.
The global benchmark Brent futures contract was likewise down 0.2% but was holding above the $40 level at $40.23 a barrel.
The surge in Covid-19 cases in the U.S. has cast doubt on whether the recent recovery in U.S. gasoline and diesel demand can hold up. The governors of Texas, Florida and California have avoided any talk of renewed lockdown measures that would represent a worst-case scenario for demand, and White House economic advisor Larry Kudlow told Fox Business News on Thursday that the U.S. economy “is not going to be closed down again.”
Even so, analysts argue that governors alone can’t force consumers to have the confidence to – for example – drive down to Florida on vacation.
The Energy Information Administration’s weekly report on the U.S. oil market on Wednesday showed fuel supplies to gas stations rising 9% in the week to June 19, less than 10% below year-earlier levels. On a four-week rolling view, which evens out some short-term volatility, gasoline supplies rose by 4% from a week earlier.
"Just because we are nearing pre-COVID levels doesn't mean we are out of the woods," Reuters quoted Patrick DeHaan, head of gasoline analysis at GasBuddy, as saying.
States like California, Texas and Florida, which have all reported record numbers of new infections this week, are all major centers of gasoline demand, especially during the summer tourism season (as regards California and Florida).
Elsewhere, gasoline RBOB futures fell to a 10-day low of $1.1353 a gallon, before recovering to be down only 2.8% at $1.1635.