Oil prices continue to decline due to the growth in the number of cases of coronavirus
SINGAPORE (Reuters) – oil Prices fall for a second straight session on Monday as the increasing number of cases of coronavirus in the U.S. and other regions have forced some countries to return a partial quarantine, with the weakening demand for fuel.
Futures on Brent crude fell by 1.76% to $40,30 per barrel by 08.30 GMT. WTI futures were down 1.79% to $37,80 per barrel.
The price of Brent crude may rise by the end of June – the third month in a row – after the world’s leading oil producers agreed to extend an unprecedented reduction of production at 9.7 million barrels per day by the end of July, and the demand for oil has improved, as countries around the world have relaxed quarantine measures.
However, the number of cases of infection with coronavirus around the world on Sunday exceeded 10 million, while India and Brazil daily record more than 10.000 new cases. Government re-impose restrictions, as new outbreaks of illness in countries such as China, New Zealand and Australia.
“The second wave of the spread (the virus) will not go away,” said Howie Lee from OCBC.
“This limits the bullish sentiment that we saw in the last six to eight weeks.”
Low processing margins, high inventories of oil and the resumption of production in the United States also limit the growth of oil prices, said Lee.
Despite the efforts of OPEC+ to reduce production, the oil reserves in the United States, the world’s largest producer and consumer of oil has reached record highs. [EIA/S]
The number of active oil and gas rigs in the US fell to a record low last week, but some producers resume drilling because of higher oil prices.
(Florence Tan; Translated By Caleb Davis. Editor Marina Bobrova)