Oil prices have declined as worries due to persistent supply glut and economic gloom caused by the coronavirus (Covid-19) outbreak combined to reduce support from output cuts at some major producers.

US West Texas Intermediate (WTI) crude futures fell $0.17, or 0.7%, to $24.57 a barrel, at 0431 GMT, while Brent crude LCOc1 futures were down 29 cents, or 0.9%, to $30.68 a barrel, Reuters reported.

Both Brent and WTI futures witnessed gains over the past two weeks as countries started easing lockdown restrictions.

Investors are concerned that easing of lockdown restrictions by some more countries to support oil prices may bring back coronavirus infections in northeast China and South Korea.

Goldman Sachs analysts said there was still concern that demand will remain weak next year.

Oil demand across the globe has plunged by about 30% as the virus outbreak restricted movement worldwide. This saw a huge buildup in inventories globally.

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By GlobalData

Furthermore, fears that the major oil producer US is running out of storage space triggered WTI prices into negative value last month.  This has prompted some of the US producers to cut output.

Mitsubishi Tokyo senior risk manager Tony Nunan was quoted by the news agency as saying: “People are surprised by how quickly the U.S. is shutting in production and that’s exactly what we need in order to support prices.

“There’s another ten days before the June contract expires … if the WTI contract can avoid a crash going into expiry, hopefully we’ve seen the bottom.”