Oil market mulls demand risks

Crude price comes under pressure from concerns over a second coronavirus wave just as Opec+ considers loosening the supply taps. But are the worries overdone?

The Nymex WTI crude contract dipped back below $40/bl on Tuesday morning, while Ice Brent struggled to hold its ground above $42.50/bl. Fears that a resurgence of Covid-19 in the US might take a chunk out of demand just as Opec+ announces a relaxation of production cuts at its Wednesday meeting set the bearish tone. The concern is understandable—the UKs’ Office for National Statistics (ONS) released figures on Tuesday morning that showed the country’s economy rebounding more slowly than expected in May, emphasising he fragility of demand. But there are also more positive demand-side factors of that traders should be mindful beyond the headlines coming out of large US states. Production boost