Oil prices fell more than 1% on Monday on fears that surging COVID-19 cases in India will dent fuel demand in the world’s third-biggest oil importer and as investors adjusted positions ahead of a planned increase in OPEC+ output from May.
Brent Crude fell 72 cents, or 1.1%, to $65.39 a barrel, following a 1.1% rise on Friday. West Texas Intermediate (WTI) crude futures were down 67 cents, or 1.1%, at $61.47 a barrel, after rising 1.2% on Friday.
India’s new coronavirus infections hit a record peak for a fifth day on Monday as countries including Britain, Germany and the United States pledged to send urgent medical aid to help battle the crisis overwhelming its hospitals.
An estimate from consultancy FGE is for gasoline demand in India to slip by 100,000 barrels per day (bpd) in April and by more than 170,000 bpd in May. India’s total gasoline sales came to nearly 747,000 bpd in March. Diesel demand, which at about 1.75 million bpd accounts for about 40% of refined fuel sales in India, may slump by 220,000 bpd in April and by another 400,000 bpd in May, FGE says.
In Japan, the world’s fourth-largest oil buyer, a third state of emergency in Tokyo, Osaka and two other prefectures began on Sunday, affecting nearly a quarter of the population as the country attempts to combat a surge in cases.
The Organization of the Petroleum Exporting Countries and allies led by Russia, known as OPEC+, surprised the market at its April 1 meeting by agreeing to ease production curbs by 350,000 barrels per day (bpd) in May, another 350,000 bpd in June and a further 400,000 bpd or so in July.