Oil down over demand concerns and mounting second wave fears

Oil was down on Monday morning in Asia amid increasing fears of a second wave of Covid-19 virus cases in several countries.

Brent oil futures fell 3.16% to $37.72 by 9:58 PM ET (2:58 AM GMT) and WTI futures slumped 3.5% to $34.99. Both futures were attempting to reverse their losses of around 8% from the last session.

Fears of a second wave of Covid-19 cases spiked over the weekend, with China reporting 57 new cases on June 13 after a new outbreak in Beijing’s Xinfadi market. Beijing has since closed both the market as well as 11 surrounding districts.

Tokyo also reported 47 new cases, its highest number since May 5. Meanwhile, across the Pacific, the US also saw an uptick in the number of cases.

The upsurge of cases in the world’s three biggest economies had investors worried that the black liquid’s fragile demand will slump back down and trigger an oversupply.

“Concerns about the recent uptick in Covid-19 infections in the US and a potential ‘second wave’ are weighing on oil at the moment,” Stephen Innes, AxiCorp’s chief global market strategist, told Reuters.

Meanwhile, OPEC+ will lead a monitoring panel scheduled to discussion its pledged crude oil production cuts and evaluate performance on Thursday, but the panel will not make any decisions.

Iraq, one of the countries struggling to meet its targeted cuts, reached a decision with major oil companies including BP (NYSE:BP) on Sunday to cut its production further in June.

OPEC extended its pledged cuts until the end of July earlier in the month.

By Investing.com: https://www.investing.com/news/commodities-news/oil-down-over-demand-worries-and-mounting-second-wave-fears-2201574