Oil retreats as Covid-19 rages unabated

Oil was down on Tuesday morning in Asia, giving up earlier gains as the Covid-19 pandemic shows no signs of ending and dampened investor sentiment globally.

Brent oil futures  dropped 0.37% to $42.94 by 12:02 AM ET (5:02 AM GMT), and WTI futures slid 0.37% to $40.48.

On Monday, Saudi Arabia hiked the price of its oil for the third month in a row, which helped support prices at the beginning of the week and ward off some of the worst concerns associated with the Covid-19 economic recovery.

But the pandemic which has already been rampant for over six months, continues to make headlines across the world. The US remains one of the hardest hit nations, with the death toll surpassing 130,000 as of July 7, according to data from Johns Hopkins University.

“Summer driving demand in the US is low, keeping gasoline demand subdued, and a reintroduction of lockdowns is a major headwind,” ANZ warned in a note.

In Asia, the situation is equally grim. India has reported more than 23,000 new cases of Covid-19. There are also signs that the virus may be mutating, creating an uncertainty that has impacted confidence in economic recovery. This has kept oil prices low despite support from record supply cuts by <a href=’https://staging.theenergyyear.com/companies-institutions/opec/’>OPEC+.

“The average age of people getting infected now is a decade and a half younger than it was a few months ago,” Dr. Anthony Fauci, Director of the US National Institutes of Health said at a press conference on July 6.

Investors are now looking to the American Petroleum Institute (API)’s estimate of crude oil supply, due later in the day.