Oil futures lost ground Monday, with weakness tied in part to concerns over the demand outlook as COVID-19 infections outside the U.S. continued to rise.
West Texas Intermediate crude for May delivery fell 10 cents, or 0.2%, to $63.03 a barrel on the New York Mercantile Exchange. June Brent crude the global benchmark, was off 10 cents, or 0.1%, at $66.67 a barrel on ICE Futures Europe.
“We can certainly see some risks on the demand side: in emerging economies in particular, which are responsible for a large part of the recovery in demand, numbers of new COVID-19 infections have jumped sharply of late, which could jeopardize the economic recovery there,” wrote Eugen Weinberg, commodity analyst at Commerzbank, in a note.
“This is presumably why demand for fuel in India, the world’s third-largest crude oil importer, has declined again recently,” he said, noting data from state refinery companies that showed diesel demand in the first half of April fell 3% to 1.38 million barrels a day. Meanwhile, gasoline demand, which tends to track private consumption, dropped by 5% to 561,000 barrels a day, he noted.
India has replaced Brazil as the country with the second highest number of cases at 15.1 million, and is fourth globally by deaths at 178,769. Brazil is third by cases at 13.9 million and second with a death toll of 373,335 Mexico is third by deaths at 212,339 and 14th highest by cases at 2.3 million.
Analysts said a weaker tone for the U.S. dollar helped offset pressure on crude. The ICE U.S. Dollar Index, a measure of the currency against a basket of six major rivals, was down 0.5%.
A softer dollar can be a positive for commodities priced in dollars, making them cheaper to users of other currencies.