Oil prices eased slightly on Monday on concerns that a resurgence of coronavirus infections in India and Japan, the world’s third and fourth-largest oil importers, would cut fuel demand in Asia.
U.S. West Texas Intermediate (WTI) crude futures was down 86 cents, or 1.38%, at $61.25 a barrel.
Both benchmark crudes fell about 1% last week.
“Market sentiment was dented on worries that surging number of COVID-19 cases in some countries, especially in India, will slash fuel demand,” Kazuhiko Saito, chief analyst at commodities broker Fujitomi Co.
Prime Minister Narendra Modi urged all citizens to be vaccinated and exercise caution, saying on Sunday the “storm” of infections had shaken India, as the country set a new global record for the most COVID-19 infections in a day.
In Japan, a third state of emergency in Tokyo, Osaka, and two other prefectures began on Sunday, affecting nearly a quarter of the population as the country attempts to combat a surge in cases three months before the Tokyo Olympics is set to open.
“Investors, including speculators, have been shifting funds from oil markets to grain markets recently as volatility has been much higher in prices of corn and other grains,” Fujitomi’s Saito said.
Chicago corn, wheat, and soybeans hit multi-year highs last week as concerns over cold weather damage to crops across the U.S. grain belt underpinned prices, along with expectations for more use of agricultural products for biofuels.
The Organization of the Petroleum Exporting Countries and allies led by Russia, known as OPEC+, will hold a largely technical meeting this week, with major changes to policy unlikely, Russian Deputy Prime Minister and OPEC+ sources said last week.
A technical committee meeting is set for Monday, where market fundamentals and compliance with production cuts will be discussed.
The producer group surprised the market at its April 1 meeting by agreeing to gradually ease record cuts in oil output.
U.S. energy firms, meanwhile, cut the number of oil rigs operating for the first time since March, as rigs fell by one to 438 last week, according to energy services firm Baker Hughes Co.