U.S. crude drops as coronavirus cases spike globally

Published 15/06/2020 in Business News, Economy & Finance

U.S. crude drops as coronavirus cases spike globally

NEW YORK (Reuters) – Oil prices fell on Monday as new coronavirus infections hit the United States and China, feeding worries that renewed lockdowns could hamper economic recovery and dent fuel demand.

U.S. West Texas Intermediate crude fell 35 cents, or 1%, to $35.91 a barrel. Brent crude rose 6 cents to $38.61 a barrel by 11:27 a.m. EDT (1506 GMT).

More than 25,000 new were reported on Saturday alone in the United States, where more than 2 million people have been infected, about a quarter of the cases worldwide.

After nearly two months with no new infections, Beijing officials reported 79 coronavirus cases over the past four days, sparking fears of an outbreak in one of the world’s most populous cities.

“As a trader you can’t see the number of new infections rising in key markets and ignore it,” said Bjornar Tonhaugen, Rystad Energy’s head of oil markets. “The risk calculator now shows that we are much closer to a second boom of the epidemic.”

Economic data from China suggested the world’s second-biggest economy was struggling to get back on track. Industrial output in May expanded 4.4% from a year earlier, less than expected.

Germany’s economic output will also fall further in the second quarter, its economy ministry said on Monday.

Still, China’s crude oil throughput in May rose 8.2% from a year earlier as independent refiners increased processing.

An OPEC-led monitoring panel will meet Thursday to discuss ongoing production cuts and see whether countries have delivered their share of reductions.

Iraq agreed with its major oil companies to cut crude production further in June, Iraqi officials working at the country’s giant southern oilfields told Reuters on Sunday.

Saudi Arabia has also reduced the volume of July-loading crude it will supply to at least five buyers in Asia, sources said.

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