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Oil prices fall by 5% as COVID cases soar

Oil prices fell sharply on Monday in one of the worst trading days for the commodity since May, 2020 when WTI slipped into the negatives. WTI was trading down 5.22% around 2 p.m. on Monday, that is $3.24 per barrel down for the day at $58.21.

The Brent benchmark was trading down 4.81% on the day, which is $3.12 down per barrel at $61.79. The sharp price fall was largely the result of oil demand fears. The UK, for instance, announced that it may continue to ban foreign travel beyond May 17, if Covid infections continue to surge around the world.

Also weighing on prices is a surge in coronavirus cases in India, which is a major oil importer. India reported on Monday the highest number of new daily Covid-19 cases since the pandemic began, triggering a lockdown in its largest city of Mumbai. This could threaten fuel demand.

Iran and the United States are also set to meet this week to discuss the possible return to the Nuclear deal. If negotiations are successful, this could mean that there will be an increase in the amount of crude oil being supplied by Iran, which is currently being stifled by U.S. sanctions.

In a show of faith in the restoration of the supply and demand situation, Saudi Arabia raised it's official selling price of crude to its most prized market, Asia.

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