Oil falls for second straight day on demand concerns in Asia

Oil prices continued to fall as the US market opened on Monday, to head for the second straight daily loss, as profit-taking from a 1-month high continued, amid demand concerns in Asia, after a spike in Covid-19 infections in India, and expectations of a fourth wave in Japan, in addition to a rise in the US drilling and exploration activities.

US crude fell 0.7% to $62.65, after opening at $63.07, and hit a day high at $63.34, and Brent crude fell 0.7% to $66.20, after opening at $66.68, and hit a day high at $66.94.

US crude lost 0.4% on Friday, and Brent crude futures fell 0.2%, in the first loss out of 5 days on profit-taking from a 1-month high.

However, oil prices gained 6% last week, and posted the largest weekly gain in a month and a half, thanks to positive demand outlook in China and the US.

The Indian health authorities announced 261,500 new Covid-19 cases on Sunday, to a total of nearly 14.8 million, second only to the US, and the death toll reached a new daily record of 1,501 victims, to a total of 150,177 victims.

To mitigate these developments, the Indian authorities may resort to tightening the lockdown, which would weigh down on fuel consumption in the third largest oil consumer in Asia.

Reuters reported that many Japanese companies believe that the Japanese economy will suffer a fourth wave of infections, which would deal another blow to businesses in the country.

Baker Hughes revealed on Friday that the US drilling and exploration rigs rose 7 rigs last week, to a total of 344, the highest level since the week ending April 24, 2020.

The increase in the US drilling activity boosted the US production by more than 47% since mid-2016 to a total of 13.1 million barrels per day in March 2020, and held recently around 10.9 million bpd due to the coronavirus pandemic, but the US is still the world's largest oil producer.