Welcome to the Reuters.com BETA. Read our Editor's note on how we're helping professionals make smart decisions.
Skip to main content

Middle East

Oil prices fall 1% on worries of pandemic surge in India

3 minute read

Pump jacks operate at sunset in Midland, Texas, U.S., February 11, 2019. REUTERS/Nick Oxford

  • India posts record daily infections and deaths
  • U.S. crude stockpiles slump after export surge -EIA

SINGAPORE, May 6 (Reuters) - Oil prices settled lower on Thursday, reversing early gains under pressure from rising COVID-19 infections in India and elsewhere although prices retained some support from a report a day earlier that U.S. crude inventories fell more sharply than expected.

Brent crude oil settled lower by 87 cents, or 1.3%, at $68.09 a barrel. West Texas Intermediate (WTI) U.S. crude futures dropped 92 cents, or 1.4%, to $64.71.

"When Saudi Arabia cut their crude selling price, it was a stark reminder that there are still pockets of danger of COVID that could impact demand," said Phil Flynn, a senior analyst at Price Futures Group in Chicago.

On Wednesday, both benchmarks hit their highest since mid-March before retreating to close little changed after two days of gains.

India posted record daily COVID-19 infections and deaths, with the virus spreading from cities to villages across the world's second-most populous nation, dashing hopes that its deadly second wave was about to peak. read more

"The record numbers of new infections in India have been making the headlines and fueling fears that demand may recover more slowly," Commerzbank said.

Yet easing restrictions in Europe and falling U.S. crude inventories supported prices.

"As the rollout of vaccines continues and a pent-up summer driving season continues to manifest, this trend should accelerate, keeping demand for motor fuels robust and boosting market confidence in the recovery story," Citi analysts said in a note.

U.S. crude stocks fell more than expected last week as refining output rose and exports surged, the Energy Information Administration said on Wednesday. read more S/EIA

U.S. crude inventories fell by 8 million barrels in the most recent week, compared with expectations in a Reuters poll for a drop of 2.3 million barrels, the Energy Information Administration said on Wednesday.

Commerzbank analysts cited "a massive fall in net crude oil imports to around 1.3 million barrels per day, their lowest level in at least 40 years."

They added that gasoline demand in the world's largest oil importer has proved disappointing, with stocks rising slightly last week.

Reporting by Jessica Jaganathan; Editing by Tom Hogue

Our Standards: The Thomson Reuters Trust Principles.

More from Reuters