Boats float in front of the Vopak oil storage terminal in Johor, Malaysia. Picture: REUTERS/HENNING GLOYSTEIN
Boats float in front of the Vopak oil storage terminal in Johor, Malaysia. Picture: REUTERS/HENNING GLOYSTEIN

Tokyo — Oil futures fell further on Wednesday after big declines the previous session with Brent sliding below $40 a barrel for the first time since June as Covid-19 cases rebounded in several countries.

The biggest global health crisis in a century continues to flare unabated with cases rising in India, Great Britain, Spain and several parts of the US, where the infection rate has not come under control for months.

The outbreak is threatening the hope for a global economic recovery that could affect demand for fuels.

Brent crude was down 16c, or 0.4%, at $39.62 a barrel by 2.41am GMT after declining more than 5% on Tuesday.

US crude was down 24c, or 0.7%, at $36.52 a barrel, having fallen nearly 8% in the previous session.

“Stalling demand has been a concern for most in the market for a while [and] it is becoming more evident,” ING Economics said in a note.

Record supply cuts by Opec and allies, known as Opec-plus 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 the seventh consecutive month in August, though at the slowest annual pace since March, suggesting industries in the world’s second-biggest economy continued their recovery from the coronavirus-induced downturn.

Reuters

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