Oil prices fell on Monday after the takeover of a major U.S. pipeline system allayed concerns over supply, although new restrictions in Asia were triggered by the surge in COVID-19 cases weighed on the feeling.
Gasoline shortages that hit the U.S. east coast slowly eased on Sunday, with 1,000 more stations receiving supplies as Colonial Pipeline’s 8900-mile system recovered from a crippling cyberattack. Read more
Brent crude oil futures fell 21 cents, or 0.3%, to $ 68.50 a barrel at 6:39 a.m. GMT, and West Texas Intermediate (WTI) crude fell 9 cents, or 0.1%, to $ 65.28. Both were in positive territory at the start of the Asian session.
Both contracts jumped nearly 2.5% on Friday and managed to post a small gain last week, marking a third consecutive weekly increase.
“The market does not have a clear direction today, although a new wave of restrictions aimed at curbing the pandemic in Asia is cooling the market mood,” said Satoru Yoshida, commodities analyst at Rakuten Securities.
Investors have remained cautious over concerns that the highly transmissible variant of the coronavirus first detected in India could spread to other countries.
Some Indian states said on Sunday they would extend COVID-19 lockdowns to help contain the pandemic, which has killed more than 270,000 people in the country. There are fears that the nation’s annual budget may fall flat as it fails to account for a crippling second wave of COVID-19 infections. Read more
Singapore warned on Sunday that the new coronavirus variants were affecting more children, as the city-state prepares to close most schools from this week, while Japan declared a state of emergency in three other prefectures hard hit by the pandemic. Read more
Disappointing retail data from China also added to the pressure, said Rakuten’s Yoshida. China’s retail sales fell sharply as officials warned of new issues affecting the recovery of the world’s second-largest economy. Read more
China’s crude oil throughput rose 7.5% in April from the same month a year ago, but remained outside the peak seen in the last quarter of 2020. read more
“With growing concerns about the spread of the pandemic in Asia, Brent prices are expected to remain within a trading range this week, with support expected at around $ 63 a barrel,” said Kazuhiko Saito, chief analyst at the brokerage. in raw materials Fujitomi Co.
Meanwhile, U.S. energy companies have added oil and gas rigs for a third week in a row, with rising crude prices prompting some drillers to return to the well, energy services firm Baker Hughes Co said on Friday. BKR.N).
In the Middle East, Israel and the ruling Hamas militant group in Gaza faced growing international calls for a ceasefire in the hostilities that entered their second week on Monday with no end in sight. Read more
“As long as the struggle does not spill over into the region’s oil-producing countries, the impact on the oil market will be limited,” said Saito of Fujitomi.
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