Oil retreats over waning confidence in global economic recovery

Oil was down on Wednesday morning in Asia, giving up some gains from the previous session.

Brent oil futures were down 0.12% to $40.65 by 9:45 PM ET (2:45 AM GMT), giving up its earlier gains. WTI futures slid 1.54% to $38.34.

Declining optimism levels over the global economic recovery from Covid-19 is starting to over-ride confidence in the black liquid after <a href=’https://staging.theenergyyear.com/companies-institutions/opec/’>OPEC+ producers committed to extend cuts until the end of July.

With the number of global cases continuing to increase daily and some countries, including South Korea, battling a second wave of cases, investors fear that this resurgence of cases could impact the already-fragile demand recovery.

“A second wave of the pandemic isn’t such a distant possibility anymore and if it is realized, oil demand, which has slowly been recovering, might plunge back to lockdown levels,” Bjornar Tonhaugen, Rystad Energy’s head of oil markets, told CNBC.

The American Petroleum Institute (API) also jolted the market with its surprise estimate of an 8.4-million-barrel build for the week ended June 5 on Tuesday, prompting renewed fears of a supply glut. Investors are now looking to the Energy Information Administration (EIA)’s prediction, due later in the day.

API reported a 500,000-barrel draw for the previous week.

By Investing.com: https://www.investing.com/news/commodities-news/oil-retreats-over-waning-confidence-in-global-economic-recovery-2197315