Oil prices fell on Tuesday, erasing earlier gains, on fears that the recent spike in confirmed COVID-19 cases in the US could affect the recovery in oil demand.
US West Texas Intermediate (WTI) crude futures dropped 0.64 percent to $40.37 per barrel, while Brent crude futures fell to $42.92 (0.42 percent).
In contrast, the price of Nigeria’s crude grades is on the increase. Bonny Light rose to $43.69 (0.36 percent), while Brass River and Qua Iboe also rose to $43.26 (0.39 percent) respectively on Monday.
According to a Reuters tally, 16 states in the US have recorded an increase in new COVID-19 cases between July 1 to July 5.
Florida has re-introduced some limits on economic reopening to tackle the rise in COVID-19 cases.
While California and Texas, two of the most populous and economical states in the US, are also reporting high infection rates as a percentage of COVID-19 tests conducted in the last week.
The Organisation of Petroleum Exporting Countries (OPEC) and its allies including Russia, also known as OPEC+, are cutting supply by 9.7 million barrels per day (bpd) in July; the third consecutive month.
The crude oil output would increase slightly in August as 7.7 million barrels per day would be cut off global supply.