Oil fell again as a fresh coronavirus outbreak in China, and increases in cases elsewhere, spurred concerns that a second wave of the virus will derail a nascent economic recovery. Futures traded near $35 a barrel in New York, sinking in tandem with equity markets, after losing 8.3% last week. Beijing closed the city’s largest fruit and vegetable supply center following a surge of cases, stirring fears of a resurgence just as the world’s largest oil user is showing signs of improving demand.
Crude’s six-week rally fizzled last week amid concerns the worst of the virus isn’t yet over and as the Federal Reserve warned the pandemic could inflict lasting damage on the American economy. BP Plc’s announcement on Monday that it will write down the value of its business by the most in a decade reinforced the picture of an industry in turmoil.
West Texas Intermediate crude for July settlement fell 2.2% to $35.46 a barrel on the New York Mercantile Exchange as of 10:44 a.m. in London. It has lost 11% since closing at a three-month high on June 10. Brent for August delivery declined 54 cents to $38.19 a barrel on the ICE Futures Europe exchange after dropping by 8.4% last week.