Oil Drops as Rising COVID-19 Cases Worldwide Awaken Demand Concerns

Oil prices dropped lower on Monday as increasing coronavirus infections across the world prompted concerns that stronger measures to contain the pandemic will yet again hit economic activity and demand for commodities.

"The progress of vaccination drives in the developed markets can be seen in road traffic levels, but resurging case numbers have reversed the recovery in the emerging countries, such as India and Brazil”, ANZ Research said today.

Indeed, India reported a record a rise in coronavirus infections of 273,810 on Monday, increasing overall cases to just over 15 million, making the country the second-worst affected after the US at more than 31 million infections. India's deaths from COVID-19 rose by a record 1,619 to nearly 180,000. Hong Kong will suspend flights from India, Pakistan and the Philippines starting April 20th due to imported coronavirus infections, authorities said. 

Japanese companies, in turn, believe that their country’s economy will experience a fourth round of coronavirus infections, getting ready for yet another hit on business. 

Brent was seen down 0.3% to $66.54 a barrel by 04.26 GMT, after rising 6% last week Monday morning. WTI, on the other hand, was down 0.2% to $62.96 a barrel, after last week’s 6.4% gain.

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