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Oil Down as Surging COVID-19 Cases in India Overshadow Anticipated Demand Increase By Investing.com

© Reuters.

By Gina Lee

Investing.com – Oil was down Monday morning in Asia as ever-surging COVID-19 cases in countries such as India dampen fuel demand hopes.

edged down 0.18% to $66.64 by 11:06 PM ET (3:06 AM GMT) and edged down 0.13% to $63.50.

India, the third-largest oil importer globally, continues to fight its second wave of COVID-19 cases. The daily number of COVID-19 cases passed the 400,000-mark on May 1, before the next day, according to the country’s Ministry of Health and Family Welfare. The record numbers led the Confederation of Indian Industry to urge authorities to curtail economic activity.

However, losses were capped as fuel demand is expected to rebound in countries such as China in the second half of 2021. Accelerating COVID-19 vaccination rates are expected to raise global fuel demand, especially during the upcoming peak summer travel season.

“Strong demand in regions such as North America, Europe and China has brightened the overall outlook,” ANZ analysts said in a note.

On the supply front, the Organization of the Petroleum Exporting Countries produced 25.17 million barrels per day in April, up 100,000 barrels from March.

In the U.S., energy firms added oil and rigs to a ninth consecutive monthly rig count increase during the previous week as prices recovered, said Baker Hughes. U.S. crude oil production, however, fell by over a million barrels per day in February to the lowest levels since Oct. 2017, according to Friday’s monthly government report.

Meanwhile, the U.S. and Iran are discussing reviving a nuclear deal, which could help life U.S. sanctions and allow Iran to bolster its oil exports.

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