Oil extended declines toward $40 a barrel as concerns about demand linger with the coronavirus raging across many regions.  Infections flared by a record in Hong Kong, and Los Angeles is on the brink of another stay-at-home order. New cases have accelerated in California, although the pace of deaths slowed in Arizona and Florida. The concerns were reflected in equity markets as well with stocks lower in Europe.

WTI oil futures are trading in a narrow range near $40 a barrel

“Risk-off environment as gauged by falling equity markets is not helping oil today,” said Giovanni Staunovo, a commodities analyst at UBS Group AG. “The stalling oil demand recovery story is also not helping. The virus continues to remain a demand concern until a vaccine is found.”

Oil has been stuck in a tight range this month after rebounding sharply from a plunge below zero in April. There are wide-ranging concerns as the pandemic is accelerating again in parts of the world and threatening demand, while OPEC+ is preparing to ease its record supply cuts starting next month. But, Russia is signaling it’s serious about using any extra supply locally and won’t send it to key refining markets like northwest Europe.

  • West Texas Intermediate for August delivery lost 0.6% to $40.35 a barrel as of 9:54 a.m London time, after falling 1.5% in the previous two sessions
    • The August contract expires Tuesday. The more-active September futures dropped 26 cents to $40.49
  • Brent for September settlement slid 0.6% to $42.90, after slipping 0.5% on Friday