Oil prices have fallen by 2% as new Covid-19 infections in China and the US, the world’s largest economies, raised concerns about the recovery of fuel demand.
Brent crude was down by $0.89 or 2.3% to reach $37.84 a barrel, while US West Texas Intermediate (WTI) crude futures were down $1.18 or 3.3%, touching $35.08 per barrel.
Both Brent and the US crude benchmarks have witnessed their first weekly decline last week after seeing seven weeks of gains. The oil prices fall is due to growing infections of the second wave of Covid-19 in the US.
The two benchmarks dropped by approximately 8% last week.
China’s capital city Beijing confirmed a record number of new Covid-19 infections, sparking concerns about the growing Covid-19 cases.
Over 25,000 new cases were identified in the US alone on 13 June as many states reported record new infections.
ING Economics said: “The recovery in oil demand is already set to be a lengthy process, and a fresh wave of cases will certainly raise worries that a recovery in demand may take even longer than initially thought.”
Meanwhile, refineries in China increased its throughput last month by 8.2% compared with the same period a year ago.
According to the official data, the total production recorded last month was approximately 13.6 million barrels per day (bpd).
The Organization of the Petroleum Exporting Countries (OPEC), including Russia and other producers, together known as OPEC+, have been curbing supply by approximately 9.7 million bpd as agreed in April.
Earlier this month, the group also agreed to extend output cuts until the end of next month.