Oil prices dropped on Monday due to oversupply and a gloomy economic outlook caused by the coronavirus pandemic. This prompted some of the world’s top producers to cancel their supply cuts.
Brent crude futures lost 0.9%, or 29 cents, at $30.68 per barrel. U.S. West Texas Intermediate crude futures dropped 0.7%, or 17 cents, at $24.57 per barrel.
Both benchmarks recovered gains in the last two weeks as restrictions began to ease. Oil demand, which plunged 30% at the onset of the pandemic, also bounced as production fell globally.
However, a potential second wave of infections in South Korea and northeastern China raised fear in the markets.
Concerns that oil storage in the United States is running out also triggered a crash in WTI prices, urging producers to cut output.
The number of oil and gas rigs in the United States dropped to 74 in the week ended May 8. This was a record fall according to energy services firm Baker Hughes Co.