Oil prices fell sharply on Monday amid concerns that surging Covid-19 cases in India and Japan, the world’s third and fourth biggest crude oil importers, will dent fuel demand. Investors also braced for a planned increase in OPEC+ output from May.
Benchmark Brent crude fell as much as 1.7 percent to $64.34 a barrel, after having rising 1.1 percent on Friday. U.S. West Texas Intermediate (WTI) crude futures were also down 1.7 percent at $61.10, after climbing 1.2 percent in the previous session. Both benchmark contracts fell about 1 percent last week.
India reported a record number of Covid-19 cases for the fifth straight day on Monday and the official death toll also jumped, plunging the country into a humanitarian crisis.
Rising virus cases in India and restrictions to limit the spread will slash fuel demand, analysts said as countries including Britain, Germany and the United States pledged to send urgent medical aid to help battle the crisis overwhelming its hospitals.
Consultancy FGE expects gasoline demand in India to slip by 100,000 barrels per day (bpd) in April and by more than 170,000 bpd in May. India’s total gasoline sales came to nearly 747,000 bpd in March. Diesel demand is expected to slump by 220,000 bpd in April and by another 400,000 bpd in May.
In Japan, a third state of emergency for Tokyo and three western prefectures began on Sunday, affecting nearly a quarter of the population.
The material has been provided by InstaForex Company – www.instaforex.com