Oil falls as worsening Covid-19 threatens recovery

Oil falls as worsening coronavirus pandemic threatens recovery

Representative Photo. Credit: Getty Images

Oil prices dipped on Monday, weighed down by the prospect that a rise in the pace of coronavirus infections could derail a recovery in fuel demand.

Brent crude was down 10 cents, or 0.2 percent, at $43.04 a barrel by 0047 GMT, after dropping slightly last week. US oil was off by 6 cents, or 0.2 percent, at $40.53 a barrel, after gaining 4 cents last week.

"With global daily Covid-19 case counts still rising and the US Sunbelt most populous states showing little success in bending and containing the (epidemic's) curve, concerns about the post-Covid recovery pace are limiting the upside for oil," said Stephen Innes, chief global markets strategist at Axicorp.

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More than 14 million people have been infected by the novel coronavirus globally and nearly 6,02,000 have died, according to a Reuters tally.

While fuel demand has recovered from a 30 percent drop in April after countries around the world imposed strict lockdowns, usage is still below pre-pandemic levels. US retail gasoline demand is falling again as infections rise.

Japan's oil imports fell 14.7 percent in June from the same month a year earlier, official figures showed on Monday. The drop was not as pronounced as in May when they fell 25 percent, year on year.

Still, exports from the world's third-largest economy slumped by a double-digit decline for the fourth month in a row as the coronavirus pandemic took a heavy toll on global demand.

In the US, energy drillers cut the number of oil and natural gas rigs operating to a record for an 11th week in a row, data showed on Friday.

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