Crude Oil Futures Settle Sharply Lower

Oil prices slid on Monday amid concerns about outlook for energy demand due to the impact of the coronavirus pandemic even as several countries across the world announced plans to reopen their economies.

China, Germany, and South Korea have all reported substantial new outbreaks of Covid-19 after they eased lockdown restrictions.

Interestingly, oil prices retreated today despite the United Arab Emirates and Kuwait saying they would cut output by larger quantities that announced earlier. The move by these countries follows Saudi Arabia’s pledge to cut crude output by 1 million barrels per day in June.

Saudi Arabia’s energy ministry directed Saudi Aramco to reduce its crude-oil production by an extra, voluntary 1 million barrels per day beginning in June, a Saudi Ministry of Energy official told the Saudi Press Agency, according to news reports.

West Texas Intermediate Crude oil futures for June ended down $0.64, or about 2.4%, at $24.14 a barrel.

Brent crude futures for June lost $1.37, or about 4.4%, at $29.60 a barrel.

As Europe and the U.S. start relaxing lockdown restrictions, there are growing fears that too hasty a return to normal could spark a second wave of coronavirus infections.

Germany has seen regional spikes in cases linked to slaughterhouses and nursing homes, official data showed Sunday, just days after Chancellor Angela Merkel said the country could gradually return to normal.

Meanwhile, 17 new Covid-19 cases were reported on the Chinese mainland, including 10 local transmissions on Monday. Elsewhere, South Korea has reported 35 new virus cases, the highest daily spike since April 9.

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