Prices of Brent and West Texas Intermediate (WTI) edged lower on today (Monday) as the recovery of a major U.S. pipeline network eased concerns over supply and a new wave of COVID-19 restrictions in Asia fuelled fears of lower demand.
Gasoline shortages that have plagued the U.S. East Coast slowly eased on Sunday, with 1,000 more stations receiving supplies as Colonial Pipeline’s 5,500-mile (8,900-km) system recovered from a crippling cyberattack.
Brent crude oil futures were down 8 cents, or 0.1%, at $68.63 a barrel as of 0036 GMT, and West Texas Intermediate (WTI) crude was down 7 cents, or 0.1%, at $65.30.
The two contracts jumped nearly 2.5% on Friday and managed to book a small gain last week, marking a third consecutive weekly increase.
“Oil prices are under pressure as a spike in the COVID-19 pandemic is spreading from India to other parts of Asia, which increased concerns over slower recovery in fuel demand,” said Kazuhiko Saito, chief analyst at commodities broker Fujitomi Co.
“We expect Brent prices to stay in a trading range this week, with support expected at around $63 a barrel,” he said.
Investors remained cautious on worries that the highly transmissible coronavirus variant first detected in India is spreading to other countries.
Some Indian states said on Sunday they would extend COVID-19 lockdowns to help contain the pandemic, which has killed more than 270,000 people in the country. There are fears that the nation’s annual budget may fall flat as it did not account for a crippling second wave of COVID-19 infections.
Singapore will shut most schools from Wednesday after the city-state reported the highest number of COVID-19 infections in months, while Japan has declared a state of emergency in three more prefectures hit hard by the pandemic.
Meanwhile, U.S. energy firms added oil and natural gas rigs for a third week in a row as higher crude prices prompt some drillers to return to the wellpad, energy services firm Baker Hughes Co said on Friday.
In the Middle East, Israel and Gaza’s ruling Hamas militant group faced mounting international calls for a ceasefire in hostilities that entered their second week on Monday with no end in sight.
“As long as the fight does not spill over to oil-producing countries in the region, there will be limited impact on the oil market,” Fujitomi’s Saito said.