In a worrisome trend in the problematic economic recovery in the United States, the prices of oil futures fell this Thursday. This comes at the backdrop of the continuance of the Covid19 in USA and its resurrection in the Europe. It is a cause of concern to the Oil sector as the USA, experiencing economic turmoil, is the world’s biggest oil consumer.

Those anxieties provoked a rally in the dollar as investors turned to safer assets, adding pressure to the prices of oil. Oil made by a stronger dollar, priced in US dollars, is becoming less attractive to global buyers.

As per the reports, one of the benchmark crude oil standards, US West Texas Intermediate (WTI) crude futures dropped by 36 cents, or 0.9%, to $39.57 a barrel at 0217 GMT, while Brent crude futures fell 28 cents, or 0.7%, to $41.49 a barrel.

Last week, the government data showed that US crude and fuel stockpiles have dropped. Both benchmarks ascended slightly on Wednesday. Falling by 4 million barrels, gasoline inventories fell more than expected, and distillate stockpiles, which include diesel and jet fuel, posted a surprise drawdown of 3.4 million barrels.

However, in the US, fuel demand remains very much meagre as the coronavirus pandemic has limited travel. The average demand for gasoline in the four-week was 8.5 million barrels per day (BPD) last week, down 9% from a year earlier, as shown in the government data.

US business activity slowed in September, with oil prices turned down, as shown in data. US Federal Reserve officials addressed concerns about a stalling recovery. In the Europe, Britain and Germany have imposed restrictions to stem new coronavirus infections. All these factors are affecting the fuel demand on an overall global scale which in turn is impacting the prices of the futures of the crudes like Brent and WTI.

Commonwealth Bank commodities analyst Vivek Dhar stated that as the demand concerns and comments from the US Federal reserve arrived in the market, oil prices fell. He further stated that this condition can be problematic for the Oil sector in the long run. Eurocontrol data states the ANZ research mentioning that the cutting travel demand in Europe due to the rise in coronavirus cases, with air traffic now 60% below 2019 levels following a sharp drop over the past two weeks has impacted the oil prices.