Oil prices ease as coronavirus infections rise

TOKYO, June 16 (Reuters) - Oil prices dipped on Tuesday on
jitters that a rise in coronavirus infections around the world
could hurt fuel demand, but hopes that production cuts could be
extended kept declines in check.
Brent crude LCOc1 was down 14 cents, or 0.4%, at $39.58 a
barrel at 0027 GMT, having gained 2.6% on Monday. U.S. oil
CLc1 fell 24 cents, or 0.7%, to $36.88 a barrel, after closing
2.4% higher in the previous session.
Coronavirus cases rose to more than 8 million worldwide by
Monday, with infections surging in Latin America, while the
United States and China are dealing with fresh outbreaks.
"Renewed optimism that OPEC+ production cuts could remain in
place if we see second wave concerns intensify have oil prices
refusing to enter freefall," said Edward Moya, senior market
analyst at OANDA.
Oil prices rose on Monday after the United Arab Emirates'
energy minister expressed confidence that OPEC+ producers that
have not been in full compliance with agreed cuts would up their
game. He also said there were signs that oil demand was
increasing as countries eased lockdowns in some parts of the
world. The Organization of the Petroleum Exporting Countries (OPEC)
and allies including Russia, a grouping known as OPEC+, agreed
this month to extend production cuts of 9.7 million barrels per
day through July.
They also called on members that have not been complying to
make up their commitments with extra cuts later.
U.S. shale producers are also cutting back on drilling amid
the collapse in demand for oil.
Production from seven major U.S. shale formations is likely
to drop to close to a two-year low of 7.63 million barrels per
day by July, the U.S. Energy Information Administration said on
Monday. U.S. drillers have slashed production and the number of oil
rigs fell below 200 last week, the lowest since June 2009,
according to energy services company Baker Hughes Co. RIG/U