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Oil prices plunged on Monday, as a catastrophic second wave of the Coronavirus pandemic in India undermined a recovery in fuel demand there, overshadowing optimism about a strong recovery in fuel demand in developed countries and China in the second half of the year.
Brent crude for July delivery fell 48 cents, equivalent to 0.7%, to $66.28 a barrel, while West Texas Intermediate crude for June delivery reached $63.11 a barrel, down 47 cents, or 0.7%t.
The total number of COVID-19 cases in India is approaching 20 million and analysts expect India’s demand for transportation fuels to fall more sharply in May due to increased restrictions.
On Sunday, a major Indian industry urged the authorities to curtail economic activity at a time when the health care system was creaking under the weight of an accelerating rate of infections.
Globally, however, a Reuters poll showed that vaccinations are expected to raise global demand for oil, especially during the peak travel season in the third quarter of the year, prompting analysts to raise their expectations for Brent prices for the fifth month in a row.
The poll, which included 49 participants, expected the average price of Brent to reach $64.17 per barrel in 2021, up from last month’s average of $ 63.12 and the average of $62.30 per barrel since the beginning of the year. On the supply side, the Organization of the Petroleum Exporting Countries pumped 25.17 million barrels per day in April, 100,000 more than in March, with increased production from Iran and other producers.
OPEC production has increased every month since June 2020, with the exception of February.
Iran and the United States are in talks to revive the nuclear deal, which could lead to the lifting of US sanctions, which would allow Iran to increase oil exports.
