Oil falls to $62 as COVID-19 infections rise

The global price of Brent crude, dropped by $2.65 to $62.21 per barrel on Monday amid upsurge in COVID-19 infections in Europe.

Brent, against which Nigeria’s oil is priced fell to $62.21 per barrel as of 9:06pm Nigerian time on Monday, while the United States West Texas Intermediate fell by $2.75 to $58.70 per barrel.

The fall happens to be the most in nearly two weeks as growing delays in Europe’s reopening and looming Iranian supply dampened hopes for a swift decline in global inventories.

The United Kingdom may delay global travel beyond May 17 if COVID-19 infections continue to surge around the world, while Italy also extended some restrictions for travelers, adding further pressure to a recovery in oil consumption, according to Bloomberg.

Meanwhile, Iran, the United States and the remaining members in the 2015 nuclear deal are set to gather in Vienna on Tuesday (today) to discuss potentially resurrecting the agreement, presenting a possible path toward removing sanctions on the Middle Eastern country’s oil exports. Yet, Iran indicated talks won’t succeed without the US fully removing sanctions.

“OPEC+ deciding to phase in production increases over time, when combined with news that potentially there could be more Iranian output, could very well mean that the market perceives there will be an imbalance more than previously,” Bart Melek, head of commodity strategy at TD Securities, was quoted by Bloomberg as saying.

‘Demand from Europe being significantly slower may derail’ the near-term outlook for consumption, he added.

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