Oil prices little changed as coronavirus and floods threaten demand

Oil prices were little changed on Monday as investors balanced concerns about fuel demand from the spread of Covid-19 variants and floods in China against expectations of tight supplies through the rest of the year.
Brent crude futures for September fell 3 cents to $74.07 a barrel by 0153 GMT while U.S. Texas Intermediate crude was at $71.99 a barrel, down 8 cents.
Both contracts recovered from a 7% slump last Monday and marked their first gains in 2-3 weeks last week as investors bet demand would stay strong amid falling oil stockpiles and rising vaccination rates.
However, coronavirus cases continued to rise over weekend with some countries posting record daily increases and extending lockdown measures that could slow oil demand. China, the world’s largest crude importer, has also seen a rise in Covid-19 cases while the nation battled severe floods and a typhoon in central and eastern parts of the country.
Also, Beijing’s crackdown on the misuse of import quotas combined with the impact of high crude prices could see China’s growth in oil imports sink to the lowest in two decades in 2021, despite an expected rise in refining rates in the second half.
However, expectations of tight supplies are underpinning prices.
Global oil markets are expected to remain in deficit despite a decision by the Organization of the Petroleum Exporting Countries and their allies to raise production through the rest of the year.