By Gina Lee
Investing.com – Oil was down Monday morning in Asia, resuming a downward trend as the prospect of more COVID-19 lockdowns in Europe increasing worries about fuel demand.
Brent oil futures were down 0.57% to $64.16 by 11:52 PM ET (3:52 AM GMT). WTI Futures were down 0.54% to $61.11 after rolling over to the May 21 contract on Mar 21. Both Brent and WTI contracts fell by more than 6% during the previous week but remained above the $60 mark.
Germany is the latest country to consider extending restrictive measures, with a draft proposal calling for the current lockdown to be extended into a fifth month as the number of new COVID-19 cases surge.
“The reality is that we’re still a long way from a full demand recovery, and it’s the record levels of withdrawn production capacity that’s the main prop for the oil market,” Axi chief global market strategist Stephen Innes told Reuters.
On the supply side, the Organization of the Petroleum Exporting Countries and its allies (OPEC+) has implemented exceptional production cuts to prop markets up as COVID-19 caused fuel demand to plunge.
In the U.S., drillers are starting to cash in on an earlier spike in prices, adding the most rigs for extracting oil since January in the week through Friday.
Energy services firm Baker Hughes Co said in its report that the oil and gas drilling rig tally, an early indicator of future production, rose nine to 411 during the previous week, the highest since April 2020. The rig count has been rising over the past seven months and is up nearly 70% from August 2020’s record low of 244.