By Bryan Wong
Investing.com - Oil was down on Monday morning in Asia as the Organization of the Petroleum Exporting Countries and its allies (OPEC+) moved to increase oil production.
Brent oil futures slid 0.76% to $43.19 by 10:11 PM ET (3:11 AM GMT) and WTI futures also dropped 0.89% to $39.91.
The production increase starting this month will see about 1.5 million barrels added to global supply per day. However, fuel demand has yet to recover due to the COVID-19 pandemic, which is affecting prices for the black liquid.
Hiroyuki Kikukawa, general manager of research at Nissan (OTC:NSANY) Securities predicted prices will stay in the low $40s this week.
“Fears over a resurgence in the coronavirus cases are weighing on oil markets,” Kikukawa told Reuters.
“Investors are worried about supply gluts as the OPEC+ is due to start reducing production cuts this month and a recovery in oil prices from record lows is expected to encourage U.S. shale producers to ramp up output.”
In the U.S., one of the largest oil consumers, California, recorded an increase in confirmed COVID-19 cases of more than the 14-day average yesterday. Victoria, Australia’s second most populous state, has also imposed new lockdown measures as COVID-19 infections surged, dampening investor hopes for fuel demand recovery.