By Gina Lee
Investing.com – Oil was down on Friday morning in Asia, continuing its retreat amid fears that a second wave of COVID-19 cases will lead to an oversupply.
Brent oil futures was down 1.56% to $37.95 by 10:03 PM ET (3:03 AM GMT) and WTI Futures lost 2.06% to $35.59.
WTI futures slid 8.2% and Brent futures was down 7.7% during the previous session.
The United States had surpassed 2 million COVID-19 cases on Friday, according to Johns Hopkins University data. Investors were calculating the implications on an already fragile demand, with the number worldwide cases fast approaching 7.5 million.
Both the American Petroleum Institute and the U.S. Energy Information Administration predicted surprise builds in crude oil supply earlier in the week, renewing concerns of a supply glut, despite a recent OPEC+ pledge to continue production cuts into July.
The losses end the rally that the black liquid has enjoyed ever since its touched negative territory in April, as the realization that the battle against COVID-19 is not over yet hits the market.
But some investors welcomed what they view as a much-needed correction.
“The oil market has been overdue a pullback, with prices getting somewhat ahead of actual fundamentals...while the market is moving from a surplus to deficit environment, inventories remain at elevated levels and refinery margins are still very weak,” Warren Patterson head of commodities strategy at ING Bank NV, told Reuters.