London — Oil prices eased on Tuesday on concerns that a fresh wave of COVID-19 infections will hamper a global demand recovery just as major producers ramp up output.
U.S. West Texas Intermediate (WTI) crude futures were down 67 cents, or 1.6%, at $40.34 (30.89 pounds) a barrel at 1020 GMT, while Brent crude dropped 71 cents, or 1.6%, to $43.44.
The declines come after WTI rose 1.8% and Brent climbed 1.5% on Monday on better than expected data on manufacturing activity in Asia, Europe and the United States.
News from Asia and Europe is adding to concerns that the infection crisis may be spreading in a global second wave, not just in the United States and Brazil, said Paola Rodriguez Masiu of Rystad Energy.
Denting fuel demand, cities from Manila to Melbourne are tightening lockdowns to battle new infections, while Norway has stopped cruise ship traffic in the latest European travel alarm.
In a further sign of a patchy rebound in demand, analysts estimate that U.S. refined product stockpiles rose last week, according to a preliminary Reuters poll ahead of data from the American Petroleum Institute later on Tuesday and the U.S. government on Wednesday.
At the same time, producers in the Organization of the Petroleum Exporting Countries (OPEC) and its allies, together known as OPEC+, are raising output this month, adding about 1.5 million barrels per day of supply. U.S. producers also plan to restart shut-in production.
“Most oil market participants expect more downward pressure on oil … with COVID-19 ravaging the landscape and OPEC+ adding more barrels into play,” said Stephen Innes, Chief Global Markets Strategist at AxiCorp.
Follow us on twitter