US crude and global benchmark Brent logged their biggest daily drops in more than three weeks, but saw monthly gains of near 6% and 8%, respectively. Fuel demand worldwide is mixed, with consumption rising in the United States and China, while other nations resume lockdowns to stem the rising infection rate.
Brent crude settled at $67.25 a barrel, falling $1.31, or 1.9% on the last day of trading for the front-month June contract. US West Texas Intermediate crude for June settled at $63.58 a barrel, down $1.43, or 2.2%. Brent gained 1.7% on the week and WTI rose 2.3%.
“It was the end of the month so there was some profit-taking, but I think the biggest issues were the reports coming out of India concerning COVID,” said Phil Flynn, senior analyst at Price Futures Group in Chicago. “That uncertainty has put the market on edge.”
India, the world’s third-largest oil consumer, is in deep crisis, with hospitals and morgues overwhelmed, as the number of COVID-19 cases topped 18 million on Thursday. The United States is restricting travel from the country, officials said Friday.
In Japan, another major crude oil buyer, imports fell 25% in March from a year earlier to 2.34 million barrels per day, according to government figures. However, the country’s factory activity expanded at the fastest pace since early 2018.
OPEC oil output rose in April due to more supply from Iran, countering the cartel’s pact with allies to reduce supply.
A Reuters survey forecast that Brent would average $64.17 in 2021, up from last month’s consensus of $63.12 per barrel and the $62.30 average for the benchmark so far this year.
