Oil eases as rising infections spark demand concerns

Weaker dollar, which traded near a one-month low, kept a floor under oil prices

LONDON:

Oil prices eased on Monday amid concerns that rising coronavirus infections in India and other countries would dent fuel demand, but a weaker US dollar limited losses.

Brent crude was down $0.1, or 0.2%, at $66.67 a barrel by 1018 GMT, after rising 6% last week. West Texas Intermediate (WTI) US oil was down $0.08, or 0.1%, at $63.05 a barrel, having gained 6.4% last week.

India reported a record rise in coronavirus infections on Monday which lifted overall cases to just over 15 million, making the country the second worst affected after the United States, which has reported more than 31 million infections.

Deaths from Covid-19 in India also rose by a record 1,619 to nearly 180,000.

The capital region of Delhi ordered a six-day lockdown on Monday, joining around 13 other states across the country that have decided to impose restrictions, curfews or lockdowns in their cities.

“This new wave of measures, while so far likely to be less stringent than what we saw in March 2020, when gasoline and gasoil/diesel demand in the country fell by close to 60%, is nevertheless set to weigh on transportation fuel consumption,” consultancy JBC said.

Hong Kong will suspend flights from India, Pakistan and the Philippines from April 20 due to imported coronavirus infections, authorities said in a statement on Sunday.

A weaker dollar kept a floor under oil prices. The US currency traded near a one-month low versus major peers on Monday, with Treasury yields hovering near the weakest in five weeks.

With oil priced in dollars, a weaker greenback could spur demand from holders of other currencies, boosting prices.

JP Morgan now expects Brent prices to break the $70 mark by May, compared with September in their previous forecast, the bank said in a recent note. It still expects them to finish the year at a similar level of about $74.