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Saturday, February 27, 2021

Oil Drops As Fears Grow Over Another Wave of COVID-19

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By David Ho

Investing.com – Oil dropped further on Wednesday morning in Asia following huge declines during the previous session, as COVID-19 cases resurge in several countries.

Brent oil futures fell 0.68% to $39.51 by 12:31 AM ET (5:31 AM GMT), falling below $40 a barrel for the first time since June. WTI futures were down 0.54% to $36.56.

COVID-19 cases continue to rise in India, U.K., Spain and several parts of the U.S., where the infection rates have not been contained for months. The number of global cases also continues to rise, approaching 27.5 million as of September 9, according to Johns Hopkins University data.

The global pandemic is dashing hopes for economic recovery that would fuel demand for commodities from aviation gas to diesel.

“Stalling demand has been a concern for most in the market for a while (and) it is becoming more evident,” stated ING Economics in a note.

The Organization of the Petroleum Exporting Countries and allies, known as OPEC+ have helped support prices through record supply cuts. But grim economic figures have dampened the outlook for oil demand.

China’s factory gate prices also fell for the seventh straight month in August . However, it was at the slowest annual pace since March, giving hope that the world’s second-largest economy is continuing its recovery.

Oil Drops As Fears Grow Over Another Wave of COVID-19

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