WTI retreats from 5-month highs
- WTI pulls back from a five-month high of $43.50.
- Coroanvirus-induced growth concerns weigh over oil prices.
West Texas Intermediate (WTI), a North American oil benchmark, is trading unchanged on the day near $42.25, having failed to establish a strong foothold at the five-month high of $43.50 on Wednesday.
According to Reuters, oil prices have pulled back due to concerns that the second wave of coronavirus infections would weigh over fuel demand and fill up storage tanks across the globe. Inventories did rise sharply in March and April following the coronavirus outbreak, causing the April futures to fall below zero for the first time on record.
The renewed concerns look to have been triggered by Federal Reserve’s recent comments that resurgence in cases is slowing the economic recovery in the world’s biggest economy.
These fears could keep oil under pressure while heading into the weekend. Also, the lingering Sino-US tensions could add to bearish pressures over the black gold. The Trump administration said on Wednesday it was stepping up efforts to purge untrusted Chinese apps from the US digital networks. In addition, the administration referred to Chinese-owned short-video app TikTok and WeChat messenger as significant security threats.
Meanwhile, the US' plans to hold high-level talks with Taiwan for the first time since 1979 could elicit a strong reaction from Beijing, as the Chinese government considers Taiwan its own territory.