Oil falls on demand worries amid surge in coronavirus cases
Oil prices dropped 2% on Thursday as a surge in new coronavirus cases in the United States and China renewed fears about a slow recovery in fuel demand.
Brent crude futures lost 1.5%, or 61 cents, at $40.10 per barrel. U.S. West Texas Intermediate crude futures fell 2.1%, or 80 cents, at $37.16 per barrel.
Concerns about fuel demand resurfaced as Beijing canceled flights and closed schools to contain a second outbreak, while several U.S. states reported a spike in new infections.
A buildup in U.S. crude stocks also weighed on the market sentiment despite the decline in gasoline and distillate inventories.
Analysts said that oil prices will remain in the $35-$40 range as long as OPEC commits to its agreed output cuts.
The oil organizations’ compliance with its record supply cuts was 87% in May, according to sources.