Oil slides as India’s worsening COVID-19 surge to hit fuel demand

Oil prices dropped on Monday on worries that rising COVID-19 cases in India will lower fuel demand in the country. Investors adjusted positions ahead of an expected increase in OPEC+ oil production from May.

Brent crude futures fell 0.6%, or 38 cents, at $65.73 per barrel, after a 1.1% increase on Friday. U.S. West Texas Intermediate crude futures lost 0.5%, or 31 cents, following a 1.2% rise on Friday. Both contracts declined almost 1% last week. 

India posted a new global record for the highest COVID-19 cases in a day. In Japan, a third state of emergency was imposed in Tokyo, Osaka, and two other prefectures on Sunday. 

OPEC and its allies surprised the market at its meeting by agreeing to slash output cuts by 350,000 bpd in May, another 350,000 bpd in June, and a further 400,000 bpd or so in July. 

The organization will hold a technical meeting this week, with major changes to policy unlikely. Meanwhile, U.S. energy firms reduced operating oil rigs for the first time since March, as rigs fell to 438 last week.