This archive report was first published on 30 June 2020.
Oil prices plummeted on Monday as the world grappled with a sharp uptick in coronavirus cases, forcing some countries to reimpose partial lockdowns and raise concerns about the pace of economic recovery and fuel demand.
According to Reuters, the death toll from Covid-19 surpassed half a million people on Sunday, with record numbers of new cases reported in countries like the US, India, and Brazil, as well as new outbreaks in parts of Asia.
“Looking ahead, anxiety is likely to remain heightened as the epic fight against the coronavirus pandemic continues. This spells bad news for risk assets (such as oil) which will inevitably remain under pressure,” said Stephen Brennock of broker PVM, as quoted by The Standard.
Oil prices were also under pressure from poor refining margins, high inventories, and the resumption of U.S. production, analysts said. However, Brent crude is set to end June with a third consecutive monthly gain after major global producers extended an unprecedented 9.7 million barrels per day supply cut agreement into July.
Meanwhile, US shale oil pioneer Chesapeake Energy Corporation filed for bankruptcy protection on Sunday as it bowed to heavy debts and the impact of the coronavirus outbreak on energy markets.
Investors will be keeping a close eye on economic data this week that will indicate the shape of economic recovery.
