Oil prices fell nearly $1 on Monday as concerns about fuel demand from the spread of COVID-19 variants, as well as floods in China, offset expectations of tight supplies through the rest of the year.
Brent crude futures for September fell 95 cents, to $73.15 a barrel while U.S. crude was at $71.11 a barrel, down 96 cents. Earlier, both contracts dipped just over $1.
According to analysis, strong U.S. demand and expectations of tight supplies are underpinning prices, enabling both contracts to recover from a 7% slump last Monday to mark their first gains in 3 weeks.
Also, Beijing’s crackdown on the misuse of import quotas combined with the impact of high crude prices could see China’s growth in oil imports sink to the lowest in two decades in 2021, despite an expected rise in refining rates in the second half.
Meanwhile, global oil markets are expected to remain in deficit despite a decision by the Organization of the Petroleum Exporting Countries and their allies to raise production through the rest of the year.