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Oil falls in second straight session as virus cools demand

Published 06/29/2020, 08:19 AM
Updated 06/29/2020, 08:20 AM
© Reuters.
LCO
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By Florence Tan
SINGAPORE, June 29 (Reuters) - Oil prices fell for a second
straight session on Monday as coronavirus cases rose in the
United States and other places, leading countries to resume
partial lockdowns that could hurt fuel demand.
Brent crude LCOc1 dropped 66 cents, or 1.6%, to $40.36 a
barrel by 1150 GMT while U.S. crude CLc1 was at $37.86, down
63 cents, or 1.6%.
Brent crude is set to end June with three consecutive
monthly gains as OPEC+ supply cuts and as oil demand improved
after countries across the globe eased lockdown measures.
However, global coronavirus cases exceeded 10 million on
Sunday as India and Brazil battled outbreaks of over 10,000
cases daily. New outbreaks are reported in countries including
China, New Zealand and Australia, prompting governments to
impose restrictions again. "The market continues to fret about the recovery in demand
as authorities reviewed reopening strategies," ANZ analysts
said, referring to the three most populous U.S. states - Texas,
Florida and California.
Despite efforts by the Organization of the Petroleum
Exporting Countries and their allies including Russia to reduce
supplies, crude inventories in the United States, the world's
largest oil producer and consumer, have hit all-time highs.
EIA/S
"There is also a risk that gains in prices recently could
see some U.S. shale producers restart wells," ANZ said.
Even as higher oil prices prompt some producers to resume
drilling, the number of operating oil and natural gas rigs
dropped to a record low last week. U.S. shale oil pioneer Chesapeake Energy Corp CHK.N filed
for bankruptcy protection on Sunday as it bowed to heavy debts
and the impact of coronavirus outbreak on energy markets.

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