Oil continues to retreat due to increasing Covid-19 cases

Oil prices continued their retreat on Thursday morning, as investors continue to monitor China’s efforts to contain a new wave of cases in Beijing.

The world’s second largest economy reported 21 new cases in the city on Wednesday, with the number of cases stemming from a weekend outbreak at the Xinfadi market now topping 150.

Investor sentiment had already soured on Wednesday after the US Energy Information Administration (EIA) predicted a further 1.215 million-barrel build in crude oil supplies for the week ended June 12. The EIA’s prediction aligned with the American Petroleum Institute (API)’s forecast of a 3.9 million-barrel build on Tuesday.

Brent oil futures fell 0.86% to $40.18 by 9:59 PM ET (2:59 AM GMT) and WTI futures slid 1.92% to $37.23, sticking to the $30 to $40 range that they have been trading in so far this month.

Some investors expected price volatility for the foreseeable future due to the uncertain demand.

“People are concerned about the coronavirus resurging in China and crude stockpiles rising…[prices are] going to be up and down, rangebound for the next little while on a balance of <a href=’https://staging.theenergyyear.com/companies-institutions/opec/’>OPEC and ally cuts against the massive inventory build and demand recovery and potential restarts of production in the United States,” Lachlan Shaw, head of commodity research at National Australia Bank (OTC:NABZY), told Reuters.

By Investing.com: https://www.investing.com/news/commodities-news/oil-continues-retreat-as-increasing-covid19-cases-trigger-demand-fears-2205246