On Monday, Oil prices weakened extending the losses recorded the week before as fresh COVID-19 infections hit China, United States and Japan, worsening fears that a resurgence of the pandemic might impact fuel demand rebound negatively.
Brent crude futures were down by 31 cents or 0.80% to $38.42 a barrel at 10:03 West Africa Time. U.S. West Texas Intermediate crude futures fell by 65 cents or 1.79% to $35.61 per barrel.
Nigeria’s banner crude grade, Bonny Light, had gained 1 cent or 0.03% at the last session to close at $37.87 a barrel. But Qua Iboe, another major grade, declined by $2.56 or 6.35 to $37.78 per barrel.
After roughly two months with no new cases, officials in Beijing have recorded 79 coronavirus infections in the past four days.
U.S. COVID-19 cases also started to rise. Over 25,000 fresh U.S. infections were reported on Saturday alone as more states recorded new cases and hospitalizations.
Economic data from China are also not promising. China’s industrial output grew by 4.4% in May from a year earlier but the gain was lower than anticipated, implying that the world’s second-biggest economy is still striving to get back on track.
Chinese refineries’ throughput in May grew by 8.2% from the same period last year to around 13.6 million barrels per day (bpd).
“Overall, with oil supply flowing in a more or less expected path, demand will now be the key price mover,” said Bjornar Tonhaugen, Rystad Energy’s Head of Oil Markets,.
An OPEC-led monitoring team will meet Thursday to discuss ongoing record output cuts and see whether countries have delivered their quota of the reductions.
Iraq, one of the laggards in complying with the production cuts, agreed with its major oil companies to slash crude output further in June, Iraqi officials working at country’s giant southern oilfields told Reuters on Sunday.