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Futures Movers: Oil edges lower as worries grow over demand outlook

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Oil futures were slightly lower in choppy trade Monday, with COVID-related fears over the demand outlook putting a limit on upside.

West Texas Intermediate crude for June delivery
CL00,
+0.47%

CLM21,
+0.47%

fell 12 cents, or 0.2%, to $63.46 a barrel on the New York Mercantile Exchange. July Brent crude
BRN00,
+0.24%

BRNN21,
+0.24%
,
the global benchmark, was off 24 cents, or 0.4%, at $66.52 a barrel on ICE Futures Europe.

Over the weekend, India counted more than 400,000 new COVID-19 cases in a single day to set another global record.

“This is not only jeopardizing the recovery of demand in this third-largest oil consuming country, but is also making the demand risks clear to market participants,” said Eugen Weinberg, analyst at Commerzbank, in a note.

See: India’s COVID-19 crisis is a ‘crime against humanity,’ says prizewinning author as nation sets new case record

Meanwhile, traders are also keeping close watch on Iran, which appears to believe it will soon be able to reach an agreement with the U.S. to lift renewed sanctions and has already boosted production and exports, “particularly to China, which does not care about the U.S. sanctions much,” Weinberg wrote.

Read: Here’s how fast Iran could boost oil output after an agreement on nuclear deal

White House officials on Sunday denied Iranian state media reports that the U.S. had reached a deal to end economic sanctions and that substantial negotiations loomed ahead, news reports said.

The U.S. also immediately denied a report by Iranian state-run television that deals had been reached for the Islamic Republic to release U.S. and British prisoners in exchange for Tehran receiving billions of dollars. The Associated Press said it wasn’t immediately clear if the report represented a move by the hard-liners running the Iranian broadcaster to disrupt negotiations over the nuclear deal.

“If Iranian oil exports, which the country’s vice president estimates at 2.5 million barrels per day, were to return to the market, this would likely put pressure on oil prices,” Weinberg said.

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