0210 GMT: Crude oil futures were trading lower in mid-morning trade in Asia June 12 as a rise in COVID-19 cases in the US clouded the overall outlook for oil demand recovery.
At 10:10 am Singapore time, ICE Brent August crude futures were down 58 cents/b (1.50%) from the June 11 settle at $37.97/b, while the NYMEX July light sweet crude contract was 72 cents/b (1.98%) lower at $35.62/b.
"A surprise stockbuild in the US last week as well as increasing concerns over a second wave of coronavirus cases in the US have been the main catalysts for oil's slide," OCBC analysts said in a June 12 note.
Bearish sentiment spilled over into early Asia trading after crude settled sharply lower June 11 on concerns a resurgent COVID-19 pandemic would dampen economic recovery.
"The oil markets turned unreservedly defenseless to a post-lockdown uptick in COVID-19 infections in the world's largest oil consuming economy, the humongous US market," AxiCorp's chief global markets strategist Stephen Innes said in a June 12 note.
Around six US states have seen an increase in new COVID-19 cases, including Texas and Arizona, according to media reports. The total number of cases in the US had surged past 2 million as of June 11.
"If a widespread secondary outbreak is confirmed, it will undoubtedly threaten to bring the US economy and global market to its knees once again," Innes added.
On the OPEC+ front, focus remains on supply cut compliance after the alliance agreed on June 6 to extend a record 9.6 million b/d of output cuts through to the end of July.
Several OPEC+ delegates have recently voiced concerns over plans for the group to meet monthly to assess production levels, S&P Global Platts reported earlier.
Meanwhile, the US oil rig count fell by seven on the week to 199, Enverus data showed June 11. This indicated that drilling activity has slowed, but failed to spur an uplift in sentiment.
