Global oil prices drop for 2nd time as COVID-19 spike

Global oil prices fell for second time as Coronavirus pandemic spike
Source: Web

On Monday, oil prices slipped again for the 2nd straight session as COVID-19 infections climbed up in the U.S. and many other countries, and those nations have to implement partial lockdowns that would definitely cut fuel demand.

Brent crude, the international benchmark, fell seventy-two cents or 1.8 percent to 40.30 dollars per barrel, on the other side, United States crude dropped sixty-seven cents or 1.7 percent to 37.82 dollars.

The international benchmark Brent crude, is set to late June with a 3rd monthly increase in a series after primary global crude producers enlarged an unparalleled 9.7 million barrels a day supply cut deal into July, while crude requests ramped up just after when many countries across the whole world loosened their lockdown restrictions.

On Sunday, COVID-19 infections have crossed ten million as Brazil and India faced blowouts of over ten thousand cases on daily bases. Moreover, novel outbreaks are emerging in many countries such as such as Australia, China, and New Zealand, encouraging to impose strict lockdown measures again.

2nd wave contagion is alive, economist says

Economist at OCBC bank of Singapore, Howie Lee, said that 2nd wave contagion is alive and well. He continued that this is capping the bullish feeling that they have seen in the previous 6 to 8 weeks.

Lee added that there are many other reasons that are restricting oil prices to be boosted at this phase, including high oil inventories, the resumption of the United States production, and weak refining margins.

Global oil prices drop for 2nd time as COVID-19 spike
Source: Web

Although various struggles by OPEC+, the world’s most prominent Organization of the Petroleum Exporting Countries and its allies such as Russia, to cut supplies, crude inventories in the U.S., the world’s top oil consumer and producer, have touched all time peaks.

Analysts at ANZ said that there is also a danger that improvements in the oil prices previously could look at some United States shale providers resume wells.

Although the quantity of working natural gas rigs and oil, fell and touched the record low earlier week, and higher oil prices are encouraging many producers to restart drilling.

Furthermore, OCBC’s Lee described that in the upcoming one-two weeks, they should observe an uptick in rig count equal with the pickup in oil production.

On Sunday, Chesapeake Energy Corp, the United States shale oil pioneer, applied for bankruptcy shield as it faced heavy debts and the effect of the COVID-19 blowout on the energy industry.