Oil prices dip again amid rising coronavirus cases and US-China tensions

File photo by EPA/SABRI ELMHEDWI

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Oil prices edged lower on Monday despite a weaker U.S. dollar, as rising coronavirus cases and tensions between the United States and China clouded the outlook for oil demand’s recovery.

Brent crude fell 25 cents to $43.09 a barrel by 12:53 p.m. EDT (1653 GMT), while U.S. West Texas Intermediate (WTI) crude fell 2 cents to $41.27 a barrel.

Following the closures of consulates in Houston and Chendu, investors worried about relations between China and the United States and have retreated to safe havens, such as gold and bonds.

“In lack of larger fundamental news, oil prices are following the overall macro trends, behaving as a ‘risky asset’ and being traded lower when safe-haven assets strengthen,” said Bjornar Tonhaugen, head of oil markets at Rystad Energy.

Meanwhile, global cases of the new coronavirus exceeded 16 million, and the virus is surging in areas of the United States.

While oil demand has risen after plunging in the second quarter, reimposed lockdowns because of rising infection rates have made the recovery uneven.

Expectations of U.S. stimulus measures and a weak dollar, which makes dollar-denominated commodities cheaper for holders of other currencies, capped losses.

via Reuters

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