Brent crude dropped on Wednesday morning in London’s trading session giving up some gains recorded from the previous session.
Brent oil futures were down 0.12% trading at $40.31.
Oil traders’ growing concerns got strengthened over the pace at which the global economic recovery from COVID-19 overriding OPEC+ pledges to extend oil production cuts until the end of July.
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With the number of COVID-19 cases increasing in many countries including Nigeria, global investors worry that this resurgence of cases could impact the already-fragile demand recovery.
“A second wave of the pandemic isn’t such a distant possibility anymore and if it is realized, oil demand, which has slowly been recovering, might plunge back to lockdown levels,” Bjornar Tonhaugen, Rystad Energy’s head of oil markets, told CNBC.
Recently, the American Petroleum Institute (API) also impacted the crude oil market negatively with its surprise estimate of an 8.4-million-barrel increase for the week that ended June 5 prompting renewed concerns of a supply glut.
Oil traders and global Investors are now awaiting the data results of the Energy Information Administration (EIA), due later today.
Meanwhile, API released a 500,000-barrel draw for the previous week.