Oil prices edged lower on Monday on rising coronavirus cases particularly in Europe and tensions between major consumers China and the United States, although China’s plans to increase U.S. crude imports curbed the losses, as reported by Reuters.
Brent crude LCOc1 fell 21 cents, or 0.5%, to $44.59 a barrel by 1254 GMT, and U.S. West Texas Intermediate crude CLc1 was down 13 cents, or 0.3%, to $41.88 a barrel.
A sharp rise in COVID-19 cases in France and Italy over weekend led the authorities to impose some new restrictions.
“Clearly the market is not tightening as quickly as initially anticipated. Demand is taking longer than expected to get back to normal levels,” ING Group said.
Market sentiment soured after the United States and China delayed a review of their Phase 1 trade deal initially slated for Saturday, citing scheduling conflicts.
However, in a positive signal, Chinese state-owned oil firms have tentatively booked tankers to transport at least 20 million barrels of U.S. crude for August and September.
Investors are also keeping an eye on a ministerial OPEC+ committee, known as the JMMC, on Wednesday that will review the oil market and compliance with the global oil supply reduction pact, although no change in the agreement is expected.
In August, OPEC+ eased its agreed cuts to 7.7 million barrels per day (bpd) from 9.7 million bpd previously.
Compliance with OPEC+ oil output cuts is seen at around 97% in July, two OPEC+ sources told Reuters.
Iran’s oil minister, Bijan Zanganeh said “OPEC’s performance has been successful because the price of oil has risen from $16 in May to around $45 and has stabilised.”
Negative data in Japan also put pressure on prices as the world’s fourth-biggest oil consumer was hit by its biggest economic slump on record in the second quarter.
In the United States the number of oil and natural gas rigs operating last week remained anchored at a record low for a 15th week, even as higher oil prices prompt some producers to start drilling again.
Reporting by Bozorgmehr Sharafedin, additional reporting by Florence Tan in Singapore; editing by David Evans
