Oil sinks as coronavirus resurgence dashes hopes for full recovery of global demand

Global crude prices are down over 1% on Monday, declining for a third consecutive day, as fresh Covid-19 outbreaks diminish prospects for global demand.

Brent crude was down 1.35% to $69.64 per barrel as of 6:57 GMT, while US crude benchmark WTI fell by 1.48% to $67.43 per barrel after a 0.9% loss on Friday.

In China, the world’s second-biggest oil consumer, factory output and retail sales growth slowed last month, as fresh outbreaks of the coronavirus infection along with flooding disrupted business activity. Meanwhile, Covid-19 cases in such Asian nations as Thailand, Vietnam and the Philippines are at or near records.

The economy of Japan, the world’s fourth-biggest importer of crude oil, is expected to grow moderately in the third quarter of the current year, as household spending is reportedly dragged down by renewed Covid-related restrictions.

Meanwhile, drilling data from the US reflects increased activity, with the total number of rigs reportedly increased by 10 last week to 397, marking the biggest weekly jump since April.

At the same time, the coalition of the Organization of the Petroleum Exporting Countries and allied oil producers have proceeded with plans to increase oil output, rolling back the curbs it introduced at the outset of the Covid-19 pandemic.

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