TOKYO- Oil prices fell on Monday, extending losses that last week ended a rally driven by production cuts and strong Chinese demand, with the market’s recovery outlook being called into question as coronavirus infections rise.
Brent crude fell 45 cents, or nearly 1 percent, to $54.65 a barrel, after dropping 2.3 percent on Friday. US oil was down by 43 cents, also nearly 1 percent, at $51.93 a barrel, having declined 2.3 percent in the previous trading session.
The benchmarks had rallied in recent weeks, buoyed by the start of COVID-19 vaccine rollouts and a surprise cut of crude output by the world’s biggest oil exporter, Saudi Arabia. Surging new infections throughout the world, however, have raised doubts about how long demand would hold up.
US drillers added further pressure by putting more oil and natural gas rigs to work for an eighth consecutive week last week because rising prices have made production more profitable. Still, the number of operating rigs is less than half of the level of a year ago.