Oil prices were down in early trade on Tuesday as a surge in new COVID-19 cases in the US sparked worries that it might prompt reimposed restrictions on business which could weigh on the already fragile oil demand recovery.
Coronavirus cases and hospitalizations soared in California, forcing the state’s governor to order bars to shut. Restaurants, cinemas, zoos, and museums in the state are also requested to halt indoor operations. Schools in Los Angeles and San Diego also said they would move classes online even when school restarts in August. Florida and Texas have also reinstated some restrictions.
The reimplementation of some restrictions is expected to hamper the recovery in fuel demand. The market will be closely watching fuel consumption data from the US Energy Information Administration and the American Petroleum Institute due to be released later on Tuesday.
Brent crude LCOc1 futures lost 43 cents (1.01%) to $42.29/barrel as of 0653 GMT, while US WTI crude CLc1 futures decreased 51 cents (1.27%) to $39.59/barrel. Both futures declined by over 2% in Asia morning trading before trimming losses.
