Commodity Market: US Crude Oil falls a second day as spiking COVID-19 cases raise concerns over fuel demand

Futures on US West Texas Intermediate Crude Oil retreated for a second consecutive trading day on Monday, as ongoing surge in new COVID-19 cases in the United States, India, Brazil and elsewhere heightened concerns that renewed partial lockdowns could restrict demand for fuel.

The total number of confirmed coronavirus cases globally exceeded 10 million, while the death toll surpassed 500,000 on Sunday, with countries such as the US, Brazil and India reporting record numbers of new infections. Additionally, new outbreaks were reported in parts of Asia, while Latin America has become the second most affected region by the pandemic, surpassing Europe.

The US reported more than 44,000 new cases on Sunday, with the recent spike being most sizable in several states to the South and to the West, which lifted restrictive measures earlier and more aggressively.

Meanwhile, Australian authorities are weighing whether to reimpose social distancing measures in some areas, following the sharpest single-day surge in new cases in at least two months.

“The second wave contagion is alive and well,” Howie Lee, an economist at OCBC bank in Singapore, said.

“That is capping the bullish sentiment that we’ve seen in the last six to eight weeks.”

According to Lee, weighing on oil prices at this point are also factors such as poor refining margins and record-high crude inventories in the United States, the largest producer and consumer of oil globally.

“There is also a risk that gains in prices recently could see some U.S. shale producers restart wells,” ANZ analysts noted.

As of 9:17 GMT on Monday, WTI Crude Oil Futures were edging down 0.21% to trade at $38.10 per barrel, after earlier falling as low as $37.54, or a price level not seen since June 25th ($37.10). WTI Crude futures dropped 3.16% last week, marking their second loss in the past nine weeks.

Brent Oil Futures were retreating 0.34% on the day to trade at $40.56 per barrel, after earlier slipping to $40.05, or a price level not seen since June 25th ($39.50). Brent futures dropped 2.86% last week, also recording their second loss in the past nine weeks.

Daily Pivot Levels (traditional method of calculation) – WTI Crude Oil Futures

Central Pivot – $38.44
R1 – $39.06
R2 – $39.96
R3 – $40.58
R4 – $41.21

S1 – $37.54
S2 – $36.92
S3 – $36.02
S4 – $35.13

Daily Pivot Levels (traditional method of calculation) – Brent Oil Futures

Central Pivot – $40.93
R1 – $41.53
R2 – $42.37
R3 – $42.97
R4 – $43.58

S1 – $40.09
S2 – $39.49
S3 – $38.65
S4 – $37.82