Oil drops from one-month highs on demand fears

Crude futures settled lower on Tuesday, pulling back from one-month highs, on fears that India, the world’s third-biggest oil importer, may impose restrictions as coronavirus infections and deaths surge to record highs.

Oil prices have risen steadily this year on anticipation that demand would recover, but while the United States and China are rebounding, numerous other countries are not.

“Unless major progress is seen beyond the key industrialized nations such as the US, the pandemic factor could require some downward adjustments in global oil demand expectations for this year,” said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois.

India, the world’s second most populous country and currently the hardest hit by Covid-19, reported its worst daily death toll on Tuesday, with large parts of the country now under lockdown amid a fast-rising second surge of contagion.

Restrictions continue to hamper travel worldwide. Hong Kong will suspend flights from India, Pakistan and the Philippines from April 20 for two weeks. read more

Brent crude settled down 48 cents, or 0.7 per cent, at $66.57 a barrel. During the session it reached its highest since March 18 at $68.08. U.S. West Texas Intermediate (WTI) crude fell 94 cents, or 1.5 per cent, to $62.44.

Crude prices rallied earlier in the session after Libya declared force majeure on exports from the port of Hariga and said it could extend the measure to other facilities, citing a budget dispute.