Oil futures continued to decline on Wednesday after a sharp drop with the previous session, as COVID-19 cases in some countries undermined hopes for a steady recovery in global demand.
Brent crude LCOc1 was up 44 cents, or 1.1%, at $40.22 a barrel by 0752 GMT after dropping more than 5% on Tuesday to fall below $40 a barrel for the first time since June.
West Texas Intermediate (WTI) crude CLc1 was up 50 cents, or 1.4%, at $37.26 a barrel, having fallen nearly 8% in the previous session.
Both key oil benchmarks are trading at nearly three-month lows.
The global health crisis continues to flare up unabated, with cases increasing in India, England, Spain and various parts of the United States. The pandemic threatens the prospects for global economic recovery that could reduce fuel demand, from aviation gas to diesel.
Some analysts say the price drop may push refinery profits back into the positive zone. They see the reduction of crude oil production and processing capacity as a big move and a potential sign that they are reaching their goal of adjusting the industry to lower demand.
Record supply cuts by the Organization of Oil Exporting Countries and its allies known as OPEC + helped support prices, but the outlook for oil demand remains gloomy with brutal economic figures reported almost daily.
China’s factory prices fell for the seventh month in a row in August, to be the lowest annual pace since March. This shows that the industries in the world’s second largest economy keep being in struggle of recovery from the coronavirus-induced decline.