FILE PHOTO: An employee holds a sample of crude oil at the Yarakta oilfield, owned by Irkutsk Oil Co, in the Irkutsk region, Russia on March 11, 2019. REUTERS/Vasily Fedosenko//File Photo
TOKYO (Reuters) – Oil prices fell on Wednesday on concerns over how quickly fuel demand will recover even as lockdowns ease in many countries with falling coronavirus cases, with U.S.-China tensions adding to pressure.
Brent crude LCOc1 futures fell 40 cents, or 0.7%, to $35.77 by 0009 GMT, after falling 1.8% on Tuesday. U.S. West Texas Intermediate (WTI) crude futures CLc1 were down 49 cents, or 1.2%, at $33.95 a barrel, having risen 3.3% the previous session.
The Organization of the Petroleum Exporting Countries and producers including Russia, a grouping referred to as OPEC+, are cutting their output by almost 10 million barrels per day in May-June to buttress prices as the coronavirus pandemic quarantines have slashed fuel demand.
In the United States, where some states are opening up after lockdowns, optimism about demand recovering has supported sentiment, but the recovery is fragile, analysts caution as the Memorial Day holiday just passed in the United States typically heralds the start of the peak demand season.
“Early estimates suggest gasoline demand is down by as much as 30% from last year as people stay close to home,” ANZ Research said in a note.
Still as U.S. demand picks up, however slowly, there are signs that inventories are falling. U.S. crude inventories are forecast to have fallen for a third week last week, according a Reuters poll of analysts.
Prices were also under press after U.S. President Donald Trump’s economic adviser, Larry Kudlow, said China was making “a big mistake” with national security legislation on Hong Kong.
Reporting by Aaron Sheldrick; Editing by Michael Perry