Oil prices recover from three-week lows

After touching three-year lows in the previous session, crude oil prices saw some gains on Friday’s trading.

Brent crude increased by 40 cents or 0.9% to trade at $43.34 a barrel.

On Thursday, Brent oil closed with a drop of 1.9%. Oil prices have been hit by a record decline in US economic growth since the coronavirus pandemic ravaged the country.

After yesterday’s close, which was the lowest level since July 10, Brent recovered much of the ground.

WTI saw an increase of 35 cents, or 0.9%, to trade at $40.27. The US crude dropped 3.3% in the previous session and recovered again from the lows not seen since July 10.

Brent is now on track for the four months of gains. Meanwhile, WTI is heading for a third consecutive month of rises. The contracts have recovered from the drops reached in April when almost the whole world was in lockdown caused by the coronavirus pandemic.

Most of the countries globally opened their economies now. Still, the second wave of the coronavirus infections rages and causes a threat to the black gold demand.

According to RBC Capital Markets, over recent weeks, oil pricing has been resilient and range-bound in nature. However, concerns about oil demand and oil production increases by OPEC and its allies raise the question of whether the oil market can absorb additional barrels.

OPEC and its allies collectively plan to boost production from Saturday. They are going to add around 1.5 million barrels per day to the global supply.

Increasing coronavirus infections dimmed the economic outlook again. The resurgence in infections raises the risk of renewed lockdowns. It is a warning to any rebound, according to Reuters polls.

According to Thursday’s reports, US gross domestic product sank at a 32.9% annualized rate. It has been the most significant decline in production since 1947.