Oil was down Monday morning in Asia over an anticipated decrease in oil demand as the number of COVID-19 cases continues to surge in India and Japan.
Brent oil futures fell 0.31% to $65.22 by 11:02 PM ET (3:02 AM GMT), and rolled over to the July 2021 contract on Apr. 25. WTI futures edged down 0.19% to $62.02. Both Brent and WTI futures remained above the $60 mark, however.
"Market sentiment was dented on worries that surging number of COVID-19 cases in some countries, especially in India, will slash fuel demand," Kazuhiko Saito, chief analyst at commodities broker Fujitomi Co., told Reuters.
The number of COVID-19 cases in India, the world’s third-largest oil importer, topped 16.9 million as of Apr. 26, according to Johns Hopkins University data.
Japan, a place behind India on the importer scale, declared a state of emergency in Tokyo, Osaka and two other prefectures starting on Sunday. The country aims to curb the spread of the virus ahead of the Tokyo Olympic games, which are set to open in July 2021.
Fujitomi's Saito also noted that investors are shifting funds from oil markets to grain markets recently “as volatility has been much higher in prices of corn and other grains."
Chicago corn, wheat and soybeans climbed to multi-year highs during the previous week as concerns over cold weather damage to crops across the U.S. grain belt supported prices. Investors also increasingly expect that more agricultural products will be used for biofuels.
On the supply front, the Organization of the Petroleum Exporting Countries and allies (OPEC+) will hold a technical committee meeting later in the day where major changes to current policy are unlikely, according to Russian Deputy Prime Minister Alexander Novak during the previous week.
In the U.S., energy firms cut the number of oil rigs in operation for the first time since March 2021, as rigs fell by one to 438 during the previous week, according to American energy services firm Baker Hughes Co.
Copyright 2021 Fusion Media Limited. All Rights Reserved.