MELBOURNE Oil prices fell on Tuesday early in the trade due to concerns about the growth in fuel demand, as a new wave of COVID-19 infections worldwide causes tighter blockades just as major producers increase the production.
US West Texas Intermediate (WTI) futures fell 22 cents, or 0.5%, to $ 40.79 a barrel at 0132 GMT, while Brent crude futures fell 27 cents, or 0.6%, to $ 43.88 a barrel.
The drop comes after the WTI rose 1.8% and Brent rose 1.5% on Monday due to better-than-expected data on manufacturing activity in Asia, Europe and the United States, showing that factories they were emerging from the worst impact of the early coronavirus pandemic.
"On the demand side, we had quite encouraging global (manufacturing) data ... but there is still quite a bit of evidence that the recovery in oil demand stalled in quite a few markets with a resurgence of COVID-19," Lachlan said. Shaw, head of product research at the National Australia Bank (NAB).
By reducing fuel demand, cities from Manila to Melbourne are restricting blockades to fight new infections, while Norway has stopped cruise traffic in the latest European travel alarm.
In another sign of an uneven pickup in demand, analysts estimate stocks of refined US products increased last week, according to a preliminary Reuters poll before data from the industry group of the American Petroleum Institute on Tuesday and the US government on Wednesday.
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