Oil down on COVID-19 concerns

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Oil futures fell on Monday, losing ground as investors continued to monitor rising COVID-19 cases in India and other countries ahead of a meeting later this week of the Organization of the Petroleum Exporting Countries and its allies, a group. known as OPEC +. West Texas Intermediate crude for June delivery CL00, -1.63% CLM21, -1.63% fell 90 cents, or 1.4%, to $ 61.24 a barrel on the New York Mercantile Exchange. June Brent BRNM21 crude, -1.72%, the world benchmark, was down $ 1.04, or 1.6%, to $ 65.07 a barrel on ICE Futures Europe.

“One concern for the market is the increase in Covid-19 cases in India, where the number of daily cases has reached a record high of almost 350,000. While the government has not imposed a national lockdown, instead we are seeing regional restrictions, so the impact on oil demand at least for now will not be as severe as we saw during the national lockdown last year, “said Warren Patterson. , head of raw materials. strategy at ING, on a note. “However, there will clearly be some impact, and some refineries in the country are already reacting to weaker fuel demand by reducing operating rates,” he said. India is recording more than a third of all new COVID-19 cases globally each day, or an average of more than 260,000 a day in the last week. India has suffered 195,123 deaths, according to its official figures, or the fourth highest in the world, although those figures are believed to be underreported. Read: The COVID-19 crisis deepens in India as the United States and others vow to help Uncertainty about the demand outlook will be a topic of discussion when OPEC + officials meet this week. They will also have to weigh the possible outcome of the Iranian nuclear talks and the possible return of the country’s crude production to the market, Patterson said. ING assumes that Iranian supply could return to 3 million barrels per day by the end of the year, up from around 2.3 million barrels per day today, but the company’s balance sheet still shows that the market would reduce inventories. he said, indicating that while Iran’s headlines could hurt sentiment, development might not turn out as bearish as it appears.