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Crude-oil prices were headed lower early Tuesday as uncertainty about demand for the commodity, in the midst of rising cornavirus cases globally nudged values lower.
Stymied business re-openings in the U.S. and reinstituted lockdowns in countries like Australia were cited as part of the reason for a pullback in crude prices on the session.
Stephen Innes, chief global markets strategist at AxiCorp, said that “the colossal elephant in the room is that there remains uncertainty on the pace of demand rebound, especially as virus outbreaks in the US southern states and other countries around the world confirm the difficulties of reopening economies safely as was evidenced today by the lockdown in Melbourne.”
Australian officials closed the border between the country’s two largest states, as the country’s second-largest city, Melbourne, recorded two deaths and its highest-ever daily increase in infections on Monday. In the U.S., California Gov. Gavin Newsom on Monday asked six counties to re-close indoor business as cases of the virus spikes.
On Tuesday, West Texas Intermediate crude for August CLQ20, -0.56% lost 23 cents, 0.5%, at $40.42 a barrel on the New York Mercantile Exchange, after ending marginally lower on Monday.
Global benchmark Brent oil for September BRNU20, -0.44% declined 14 cents, or 0.3%, at $42.97 a barrel on the ICE Futures Europe exchange, following a gain of 0.7% in the previous session.
Crude investors are also still digesting the temporary shutdown of the Dakota Access pipeline by a U.S. federal judge on Monday. The 1,172-mile underground pipeline, which has been in operation since June 2017 and can transport 570,000 barrels of oil per day, runs beneath the Missouri River, north of the Standing Rock Indian Reservation, which could weigh on prices because it could temporarily impact the transport of crude.
