Oil falls as India COVID-19 crisis takes toll on fuel sales

Oil prices dropped on Monday as a worsening second COVID-19 wave in India cut off oil demand recovery in the country. This offset optimism about a strong demand rebound in developed countries in the second half of 2021. 

Brent crude futures for July contract lost 0.2%, or 15 cents, at $66.61 per barrel. U.S. West Texas Intermediate for June delivery fell 0.2%, or 10 cents, at $63.48 per barrel.

State-level lockdowns to curb rising infections in India have caused fuel sales in the country to drop in April. 

However, global vaccination programmes are expected to boost oil demand, particularly during peak travel season in the third quarter. Analysts expect Brent to average $64.17 per barrel in 2021.

Meanwhile, OPEC pumped 25.17 million bpd in April, up 100,000 barrels from the previous month. U.S. energy firms added oil and natural gas rigs last week, its ninth consecutive month of increase.

Still, U.S. crude production fell by more than a million bpb in February, its lowest since October 2017.