Crude oil prices drifted lower on Monday as concerns about the energy demand outlook resurfaced amid worries about rising new coronavirus cases over the weekend.
Although the Trump administration has ruled out fresh lockdown measures, the relentless surge in new coronavirus cases in several states across the U.S. raises the possibility of fresh lockdown steps in at least a few virus hotspots.
The Energy Information Administration’s forecast that oil production from major U.S. shale plays will likely drop by 56,000 barrels a day next month helped limit oil’s slide.
The EIA report said shale output from six of the seven U.S. shale producers will likely see monthly declines, with the Eagle Ford region expected to register the biggest oil output drop in August.
West Texas Intermediate Crude oil futures for August ended down $0.45 or about 1.1% at $40.10 a barrel. Brent crude futures shed about 1% to close at $43.23 a barrel.
According to a report from the World Health Organization (WHO), global coronavirus cases rose by over 230,000 across the globe over a 24-hour period.
According to the UN health agency, the United States topped the list, with more than 66,000 cases recorded, as Florida surpassed the 15,000 mark of new cases on Sunday.
Meanwhile, the relationship between China and the U.S. soured further last week.
“The relationship with China has been severely damaged. I don’t think about it now,” U.S. President Donald Trump told reporters on Friday from Air Force One when asked about the second phase of the trade deal.
The relationship between the two countries has been severely damaged with Beijing’s handling of the coronavirus outbreak. The Chinese government has now announced sanctions against U.S. officials, including Republican senators Marco Rubio and Ted Cruz, in response to Washington’s sanctions against senior Chinese officials.
The market was also looking ahead to the OPEC’s upcoming Joint Ministerial Monitoring Committee meeting, scheduled to take place on Tuesday and Wednesday. The officials will be discussing global energy demand and supply situation and recommend levels for future supply cuts.
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