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Oil prices have edged down on fears over how quickly the fuel demand would recover as many countries begin easing of coronavirus (Covid-19) lockdown.
Brent crude futures were down by 50 cents, or 1.4%, to $35.67, while US West Texas Intermediate (WTI) crude futures fell 52 cents, or 1.5%, at $33.83 a barrel, Reuters reported.
The record output cuts of nearly 10 million bpd agreed by the OPEC+ Group for this month and next month started from 1 May.
These output cuts are to counter the collapse of prices due to coronavirus outbreak that cut the demand. Top of Form
According to the news agency, analysts have warned that optimism over an increase in fuel demand has backed sentiment as many US states have lifted lockdown restrictions. But the recovery is still unstable.
Reuters cited ANZ Research as stating in a note: “Early estimates suggest gasoline demand is down by as much as 30% from last year as people stay close to home.”
According to Eurasia Group, some analysts and banks are forecasting a stabilised oil market by next month.
A Reuters poll of analysts suggests that “the US crude stockpiles are forecast to have fallen for a third week last week”.
Furthermore, US President Donald Trump economic adviser Larry Kudlow said that China’s national security law on Hong Kong is a “big mistake”.
The proposed Chinese security law seeks to reduce the separate legal status of Hong Kong.
The parliament of China is expected to approve the new legislation by 28 May.