Oil slips on demand concerns, but posts a gain for the week

South Belridge Oil Field is the fourth-largest oil field in California and one of the most productive in the U.S.
David McNew | Getty Images

Oil prices fell more than 1% on Friday, limiting their weekly gain due to concerns the global recovery could falter from a resurgence of coronavirus cases.

The rise in infections remains the dominant issue for the fuel demand outlook. Cases in the United States are still rising in a number of states, while India recently reported a record daily jump in infections. More than 700,000 people have died in the worldwide pandemic.

Brent crude fell 78 cents, or 1.7%, to $44.31 a barrel. West Texas Intermediate crude settled 67 cents, or 1.6%, lower at $41.28 per barrel.

Brent is set for a weekly gain of 2.3%, while WTI is on track to rise 2.1%.

Talks between U.S. lawmakers over another round of stimulus have stalled, meanwhile. U.S. President Donald Trump has threatened to pull White House representatives out of talks and instead issue executive orders to address economic needs.

"The U.S. Congress can't seem to come up with a plan for the next round of stimulus and it's creating doubt for U.S. economic recovery," said Gary Cunningham, director of market research at Tradition Energy.

OPEC member Iraq pledged to cut output further in August, which helped support prices. The nation has been a laggard in fully meeting its pledge as part of an April deal to reduce supply.

Crude has recovered from lows reached in April, when Brent slipped below $16, a 21-year low.

"Keeping the price levels would be unrealistic," Bjornar Tonhaugen of Rystad Energy said of this week's rise. "Traders rushed to the task today to correct the gains, remembering the invisible enemy, COVID-19."

U.S. non-farm payrolls for July came in slightly better than expected, but still showed employment growth slowed. U.S. Democratic leaders said the jobs report showed more investments were needed.

U.S. energy companies cut the number of oil and natural gas rigs this week to a record low for a 14th week. U.S. oil rigs fell by four to 176 this week, their lowest since July 2005, according to data on Friday from energy services firm Baker Hughes Co.