Dropping Prices of Crude Oil with Second Wave of COVID-19

Oil prices dropped down for the second day on Wednesday, April 21, concerns that COVID-19 cases in the Nation will down the fuel demand in the world’s third-biggest oil importer.

Brent crude futures for June fell 52 cents, or 0.8%, to $66.05 a barrel at 01:57 on Wednesday, after falling 48 cents on Tuesday. Unites States West Texas Intermediate (WTI) crude futures for June fell 56 cents, or 0.9%, to $62.44 barrel. This May contract expired on Tuesday down 1.5% at $62.44.

Lachlan Shaw, Head of Commodity Research at National Australia Bank said, “You’ve seen refiners there (in India) scale back runs because demand has decreased with the lockdowns. That’s clearly weighing on the market and sentiment.”

Ravindra Rao, Vice President for Commodities at Kotak Securities said, “India is a major crude oil consumer. Increasing COVID cases and thereby restrictions to limit the spread will dispirit the demand outlook.”

“Global crude markets remain well supplied with OPEC and its allies scheduled to hike production in coming months. So, if the demand won’t increase significantly, prices may improve further.”

On Tuesday, India reported its worst daily death toll from coronavirus. And large parts of the country are now under lockdown because of the dangerous and huge second wave of COVID-19.