SINGAPORE (Reuters) – Oil prices nudged higher on Monday on tighter supplies from major producers, but concerns that a record rise in global coronavirus cases could curb a recovery in fuel demand checked gains.

Brent crude LCOc1 rose 9 cents, or 0.2%, to $42.28 a barrel by 0009 GMT, while U.S. crude CLc1 was at $39.76 a barrel, up 1 cent.

Both contracts rose about 9% last week and Brent crude futures flipped into backwardation, where oil for immediate delivery costs more than supply later, usually an indication of tightening supply. LCOc1-LCOc2

In the United States and Canada, the number of operating oil and natural gas rigs fell to a record low even as higher oil prices prompt some producers to start drilling again.

Iraq and Kazakhstan pledged to comply better with oil production cuts during an OPEC+ panel on Thursday.

However, the OPEC+ group, consisting of Organization of the Petroleum Exporting Countries and its allies including Russia, has yet to decide whether to extend a record supply cut of 9.7 million barrels per day (bpd) for a fourth month in August.

Oil prices have also been supported by a recovery in fuel demand globally following a collapse in April-May during coronavirus shutdowns as countries across the world resume economic activities.

Still, the World Health Organization reported a record jump in global coronavirus cases on Sunday, with the biggest increase seen in north and south America.

Spikes in coronavirus infections in parts of the world such as Beijing and Australia’s second-most populous state Victoria have prompted authorities to reimpose movement restrictions to curb the spread.

“The potential economic damage of a new round of COVID-19 countermeasures will likely contain any investor enthusiasm,” said Michael McCarthy, chief market strategist at CMC Markets.

Reporting by Florence Tan; editing by Richard Pullin

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like

Europe looking for positive signal from U.S. on trade: EU lawmaker

WASHINGTON (Reuters) – The European Union hopes to de-escalate trade tensions with the United States but wants Washington to lower steel tariffs or make another goodwill gesture after a series of concessions by Brussels in recent years, a top EU…

Larry King was the everyman’s interviewer

New York (CNN)Larry King often came across as the guy who sat next to somebody on an airplane and started up a conversation by asking: “So what do you do?” Except sometimes that person was Vladimir Putin, or Marlon Brando.…

University inks deal to boost smart sports development

Shanghai University of Sport inked a memorandum of understanding on partnership with the United States-based tech giant Qualcomm and Pong-bot, a Shanghai-based developer of robots, to empower the development of smart sports with technologies including 5G and artificial intelligence at…

India’s factory growth highest in over a decade as demand bounces back

The IHS Markit India Manufacturing Purchasing Managers’ Index (PMI) rose to 58.9 last month from 56.8 in September on the back of the ongoing relaxation of Covid-related restrictions. The readings show that India’s economy is healing after shrinking by a…