After rising at the start of the session, oil prices made a U-turn on Monday morning and slipped as rising coronavirus cases in many countries and stalling commercial flights recovery raised concerns about oil demand recovery.
Earlier on Monday, the price of oil rose on the back of a weaker U.S. dollar and another major stimulus expected in the United States.
However, by 10:00 a.m. EDT on Monday, WTI Crude was trading down 0.85 percent at $40.97, and Brent Crude prices were down 0.92 percent on the day at $42.95, as resurging COVID-19 cases in Spain prompted the UK to re-impose on Sunday self-isolation for travelers from Spain. Some countries, including Spain, were considering localized lockdowns.
The rising U.S.-China tensions with the closing of consulates in Houston and Chengdu, China, were also weighing on oil prices as investors sought safe-haven assets and gold hit record highs.
Further stoking fears of oil demand recovery was data from global flight tracking service Flightradar24, which showed that "After increasing for 12 straight weeks, the rise in global commercial traffic has stalled."
In China, the worst floods in decades along the Yangtze River could threaten industrial output recovery after the pandemic. The Yangtze River Basin generates nearly half of China's gross domestic product (GDP), according to the South China Morning Post.
In a sign that oil demand for commuting to work may not recover to pre-crisis levels, Google is set to tell its employees to work from home until at least July 2021, The Wall Street Journal reported on Monday, citing people with knowledge of the plans. The WFH plan will be valid for almost all of Google's 200,000 full-time and contract employees at parent Alphabet, according to The Journal, and could prompt other tech giants and companies from other sectors to extend their work from home timetables and allow employees to work from home permanently.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More