Oil falls further on demand worries

Oil futures fell further on Wednesday after a steep decline in the last session. This came after a surge in new coronavirus cases in some countries offset hopes for a steady fuel demand recovery.

Brent crude fell 0.5%, or 19 cents, at $39.59 per barrel. It dropped over 5% on Tuesday to trade below $40 per barrel for the first time since June.

U.S. crude lost 0.7%, or 24 cents, at $36.52 per barrel following an 8% fall in the last session. Both benchmarks are standing at three-month lows.

Several countries including the United States, Spain, India, and the United Kingdom reported a surge in new coronavirus infections. The health crisis is threatening to stall global economic recovery and lessen oil demand.

OPEC+ record supply cuts have supported oil prices. However, bleak economic data has weighed on fuel demand outlook.

Meanwhile, Chinese factory gate prices dropped for a seventh consecutive month in August, showing a continuous recovery in the world’s second-biggest economy.