Oil prices have edged-down due to growing concerns over a second wave of Covid-19 infections this week in the US, the world’s biggest consumer of fuel.
Brent crude was down $0.58 cents, or 1.5%, to reach at $37.97 a barrel, while West Texas Intermediate (WTI) declined $0.65, or 2%, to $35.69 a barrel, Reuters reported.
According to the news agency, a rally that increased oil off April’s lows has halted this week as the Covid-19 outbreak may be far from over globally, with cases in the US alone having surpassed two million.
Both the Brent and the US crude benchmarks are now heading towards their first weekly decline in seven weeks. The two benchmarks were dropping by about 10%.
Reuters quoted Barclays as saying in a note: “Oil prices have rebounded sharply … helped by positive surprises in incoming data on demand and continued OPEC+ restraint.
“But we expect the pace of price recovery to slow down along with rebalancing.”
Producers from the US, as well as from the Organization of the Petroleum Exporting Countries (OPEC), including Russia and other producers, together known as OPEC+, have been curbing supply by record amounts.
Despite the output cuts, the US crude and gasoline inventories grew last week, according to official data.
This gave rise to concerns about imbalance in supply-demand, as the US states Texas and Arizona are witnessing a rise in Covid-19 infections.
So far, over 7.43 million people have been infected by the novel coronavirus (Covid-19), according to a Reuters tally.
The pandemic has claimed lives of at least 400,000 people across the world.