Oil drops second day as surging coronavirus cases prompt demand worries

Oil prices fell for a second day on Wednesday, extending big losses from the previous session amid rising concerns about fuel demand as the coronavirus pandemic worsens.

Brent crude dropped 23 cents, or 0.6%, to $41.03 per barrel by 0048 GMT. West Texas Intermediate fell 26 cents, or 0.7%, to $39.29.

The benchmarks fell more than 3% on Tuesday as global COVID-19 cases passed 1 million, having doubled in three months.

"It is important to keep in mind that moves to the downside have the potential to be supersized," given rising coronavirus cases and increasing oil supplies around the world, said Bob Yawger, director of energy futures at Mizuho in New York.

CEOs of the world`s biggest trading companies are forecasting a weak recovery for oil demand and little movement in prices in the coming months and potentially years.

Weighing heavily on markets is the continued depressed demand for jet fuel, with air travel in the doldrums due to coronavirus restrictions and a general disinclination to travel.

Refineries have been trying to find ways to blend their product but an oversupply remains and some plants will be forced to shut down.

Marathon Petroleum Corp, the largest oil refiner in the United States, started imposing job cuts on Tuesday, according to people familiar with the matter.

To counter the fall in demand the Organization of the Petroleum Exporting Countries is unlikely to increase oil production as planned from January next year, traders said on Tuesday.

The market looked past data from the American Petroleum Institute on Tuesday showing U.S. crude oil stocks fell against expectations, focussing instead on the rise in gasoline inventories.

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Also keeping traders and investors on tenterhooks is the November presidential election, which may remain undetermined on election night, with both candidates contesting the results.