0200 GMT: Crude oil futures were trading lower in mid-morning trade in Asia June 17, after settling higher overnight, as reports of fresh COVID-19 outbreaks continued to weigh on hopes of economic recovery.
At 10 am Singapore time (0200 GMT), ICE Brent August crude futures were down 64 cents/b (1.56%) from the June 16 settle at $40.32/b, while the NYMEX July light sweet crude contract was 78 cents/b (2.03%) lower at $37.60/b.
Both benchmarks had settled more than $1.20/b higher June 16 after the release of bullish demand projections by the International Energy Agency and stronger-than-expected US retail sales data for May.
"However, the rally was capped by concerns about a second wave of COVID-19 cases. Beijing shut its schools and lifted its emergency response to level two to contain a new outbreak," ANZ analysts said in a June 17 note.
China reported 44 new coronavirus cases nationwide on June 16, comprising 11 imported and 33 local acquired cases, increasing concerns over a resurgence of infections, according to media reports.
"This comes amid rising cases in the US. The market was reminded of the damage the pandemic has caused the oil market, with the IEA calling it the biggest shock to world energy markets since WWII [World War Two]," ANZ analysts added.
While US markets remained buoyed by recent Federal Reserve announcements of efforts to stimulate the economy, the number of new COVID-19 cases continued to trend higher in the US, hitting record highs in six US states on June 16 and posing further concerns over oil demand recovery.
The outlook is expected to remain volatile as investors weighed new COVID-19 headlines versus the optimistic US market data seen earlier in the week.
US retail sales jumped by a record 17.7% month on month in May, even as May sales remained 6.1% lower from the same month a year earlier, latest data showed.
