# Oil eases as weak Asian data, more lockdowns dampen demand hopes
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2021-08-17
Category: INVESTING
Category URL: https://financedigest.com/category/investing
Meta Title: Oil Prices Weaken on Surging COVID-19 Cases in Asia
Meta Description: Stay informed about the latest oil market news as prices dip due to rising coronavirus cases in Japan and weakening demand in Asia.
URL: https://financedigest.com/oil-eases-as-weak-asian-data-more-lockdowns-dampen-demand-hopeshtml

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By Devika Krishna Kumar

NEW YORK (Reuters) -Oil prices weakened for a fourth session on Tuesday, on the back of surging cases of coronavirus in Japan and a weak demand picture in Asia, and as OPEC and its allies believe the market does not need more crude.

Brent crude was down 3 cents at $69.48 per barrel as of 12:05 p.m. ET (1605 GMT.) U.S. West Intermediate crude (WTI) fell 18 cents, or 0.3%, to $67.11 a barrel. Both contracts had fallen for three straight sessions.

Japan, the world third largest economy, on Tuesday extended its state of emergency in Tokyo and other [regions and announced](https://www.financedigest.com/adverty-and-yazle-announce-exclusive-in-game-ad-partnership-in-mena-region.html "Adverty and Yazle announce exclusive in-game ad partnership in MENA region") new measures covering seven more prefectures to counter a spike in COVID-19 infections that is threatening the medical system.

Meanwhile New Zealand entered a new [lockdown after the country’s first coronavirus case](https://www.financedigest.com/shanghai-finds-cases-after-five-days-of-zero-covid-but-end-of-lockdown-on-track.html "Shanghai finds cases after five days of ‘zero COVID’ but end of lockdown on track") in six months was reported.

[Hedge funds](https://www.financedigest.com/what-is-a-hedge-fund.html "What Is A Hedge Fund") and money managers cut net long positions in U.S. crude to the lowest [since November in the week](https://www.financedigest.com/the-nasdaq-100-on-track-to-have-its-best-week-since-march-2010.html "The Nasdaq 100 On Track to Have its Best Week Since March 2010") to Aug. 10 as resurgent coronavirus infections in several countries [dampened hopes](https://www.financedigest.com/no-santa-rally-for-markets-as-central-banks-dampen-peak-rate-hopes.html "No Santa rally for markets as central banks dampen peak rate hopes") of a rapid resumption in long-distance air travel.

Although some progress in slowing or reversing COVID-19 trends is being seen, the oil market will likely require a distinct down trend in the virus that will allow [China to re-open its economy](https://www.financedigest.com/china-steps-up-easing-cuts-lending-benchmarks-to-revive-faltering-economy.html "China steps up easing, cuts lending benchmarks to revive faltering economy") in allowing the energy complex to establish a near-term base of support capable of reversing the long liquidation out of the WTI space,” said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois.

Daily crude processing in China, the world’s biggest [oil importer](https://www.financedigest.com/indias-reliance-makes-rare-buy-of-russian-naphtha-ups-fuel-oil-imports.html "India’s Reliance makes rare buy of Russian naphtha, ups fuel oil imports"), fell to its lowest in July since May 2020 as independent plants slashed production amid tighter quotas, high inventories and weakening profits, data showed on Monday.

China’s factory output and [retail sales](https://www.financedigest.com/uk-retailers-turn-positive-on-sales-hopes-after-bleak-winter.html "UK retailers turn positive on sales hopes after bleak winter") growth also slowed sharply and missed expectations in July, as new COVID-19 outbreaks and floods disrupted businesses.

On the supply side, U.S. shale [oil output is expected to rise](https://www.financedigest.com/oil-gains-after-iea-sees-demand-rising-to-record-high.html "Oil gains after IEA sees demand rising to record high") to 8.1 million barrels per day (bpd) in September, the highest since April 2020, according government data on Monday.

Last week, U.S. President Joe Biden’s administration urged OPEC+, which groups members of the Organization of the Petroleum Exporting Countries and other producers such as Russia, to boost [oil output](https://www.financedigest.com/uk-oil-gas-firms-to-leave-years-worth-of-output-in-ground-with-tax-hikes-report.html "UK oil, gas firms to leave year’s worth of output in ground with tax hikes-report") to tackle rising gasoline prices.

But four sources told Reuters on Monday that the group believes [oil markets do not need more crude](https://www.financedigest.com/oil-falls-as-earthquake-impact-on-crude-eases-rate-hike-fears-rise.html "Oil falls as earthquake impact on crude eases, rate hike fears rise") than they plan to release in the coming months.

(Additional reporting by Shadia Nasralla and Yuka Obayashi; Editing by Marguerita Choy and David Evans)


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