Oil slips on surge in COVID-19 infections, U.S.-China tension
Oil prices fell about 1% on Monday after global coronavirus cases rose a record daily, increasing fears of renewed government closures and growing tensions between the US and Europe with China.
The World Health Organization reported more than 230,000 new cases of coronavirus, a daily record, on Sunday. Much of the growth takes place in the western hemisphere, particularly in the United States and Latin America.
In the United States, infections increased over the weekend when Florida saw an increase in over 15,000 new cases within 24 hours, a record for every state. Numerous states have reversed the easing of business restrictions and are now requiring masks to slow down the spread of the virus, which killed nearly 140,000 people in the United States.
Brent futures fell 52 cents or 1.2% to $ 42.72 a barrel, while crude oil from the US West Texas Intermediate (WTI) lost 45 cents or 1.1% and settled at $ 40.10.
The market also remained marginalized due to growing disputes between the United States and Europe with China. The European Union (EU) said it is preparing countermeasures against China in response to Beijing’s new security law for Hong Kong.
China announced sanctions against the United States on Monday after Washington fined high-ranking Chinese officials for treating Uyghur Muslims.
A monitoring committee from the Organization of Petroleum Exporting Countries (OPEC) will meet on Tuesday and Wednesday and is expected to recommend levels for future supply cuts
OPEC and allies including Russia are expected to ease production cuts to 7.7 million barrels per day (bpd), down from a record cut of 9.7 million bpd for May through June, as global oil demand has recovered.
“That seems a quite risky option, with the safer being a one month extension,” said Edward Moya, senior market analyst at OANDA in New York.
