Oil edged lower after a weekly gain as investors weighed worsening relations between Washington and Beijing and the prospect of more supply against a weakening dollar and signs the virus is easing in the U.S. Futures in New York fell toward $41 a barrel after rising 1.7% last week. Chinese authorities took over the U.S. consulate in Chengdu on Monday after Beijing slammed the “forced entry” to its Houston consulate by American personnel and vowed to respond “as necessary.” The breakdown in relations between the world’s two largest economies threatens to complicate the global economic recovery from the coronavirus.

There was some evidence, however, that the surge in the pandemic over the past few weeks in the U.S. could be starting to ease. Reported cases and fatalities fell in many of the hardest-hit states including Florida, California and Texas and the death toll dipped under 1,000 for the first time in four days.

Brent has moved deeper into contango this month

Crude has been trading in a tight range near $40 a barrel since early June after its rapid recovery from lows in April petered out as many countries struggled to bring the virus under control. A drop in the dollar has also supported prices this month, although investors are bracing for fresh supply from the OPEC+ alliance when it relaxes its output curbs from August.

  • West Texas Intermediate for September delivery fell 0.6% to $41.05 a barrel on the New York Mercantile Exchange as of 7.41 a.m. in Londo after closing up 0.5% on Friday.
  • Brent for September settlement declined 0.6% to $43.08 on the ICE Futures Europe exchange following an 0.5% advance last week.