TOKYO (Reuters) – Oil futures fell again on Wednesday after a sharp slide in the previous session, as a rebound in COVID-19 cases in some countries undermined hopes for a steady recovery in global demand.

Brent crude LCOc1 was down 25 cents, or 0.6%, at $39.53 a barrel by 0455 GMT after dropping more than 5% on Tuesday to fall below $40 a barrel for the first time since June.

U.S. crude CLc1 was down 28 cents, or 0.8%, at $36.48 a barrel, having fallen nearly 8% in the previous session.

Both major oil benchmarks are trading at around three month lows.

The global health crisis continues to flare unabated with cases rising in India, Great Britain, Spain and several parts of the United States.

The outbreak is threatening hopes for a global economic recovery that could reduce demand for fuels from aviation gas to diesel, although the price slump could lift refinery profits back into positive territory, Eurasia said in a note.

“That would be a major move and potentially a sign for the industry that the crude production and processing capacity reductions have finally met their goal in adjusting the industry in line with lower demand,” it said.

Record supply cuts by the Organization of the Petroleum Exporting Countries and allies, known as OPEC+ have helped support prices, but with grim economic figures being reported almost daily, the outlook for demand for oil remains bleak.

China’s factory gate prices fell for a seventh straight month in August although at the slowest annual pace since March, suggesting industries in the world’s second-biggest economy continued their recovery from the coronavirus-induced downturn.

Reporting by Aaron Sheldrick; Editing by Lincoln Feast and Richard Pullin

Leave a Reply

Your email address will not be published.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

You May Also Like

Trump says should be possible to allow PPP borrowers more time to use loans

WASHINGTON (Reuters) – U.S. President Donald Trump said on Monday extending the amount of time borrowers in the Paycheck Protection Program have to spend their funds to 24 weeks from the current eight weeks “should be easy.” Trump made the…

EU gives upbeat assessment of state of Brexit trade talks

BRUSSELS — The European Union issued Friday one of its most upbeat assessments of the state of post-Brexit trade negotiations, as the talks face an ever tighter deadline for a deal to enter into force for the start of the…

James Moore Facebook boycott gathers strength as advertising giants climb aboard

When it was just Patagonia, Ben & Jerry’s and The North Face, Facebook could maybe just shrug its shoulders. Now, not so much. Turns out those brands were the first little snowballs rolling down the mountain that you see before…

FAW’s tech thrust gets into fast lane

China FAW Group Co Ltd, the Changchun-based State-owned automaker, plans to invest 110 billion yuan ($16.2 billion) in new technologies and products such as new energy, connected and smart vehicles during the 14th Five-Year Plan (2021-25) period, said its top…