Oil drops on demand worries as U.S. virus cases surge
Oil prices dropped on Tuesday as investors feared that the steady rise in coronavirus cases in the United States will stall demand recovery.
U.S West Texas Intermediate crude futures were down 0.4%, or 17 cents, at $40.46 per barrel. Brent crude futures fell 0.4%, or 19 cents, at $42.91 per barrel.
As 16 U.S. states reported a surge in new infections, re-imposed health and social measures could impact fuel demand.
OPEC and its allies including Russia are slashing production by 9.7 million bpd for the third month in July. However, those cuts are set to lower to 7.7 million bpd next month.
Data on U.S. gasoline stockpiles due later today are expected to show a 100,000 barrel rise. Gasoline demand remains heavily affected by the virus outbreak.