Brent crude LCOc1 dropped 83 cents, or 2%, to $40.19 a barrel by 0456 GMT, while U.S. crude CLc1 was at $37.69, down 80 cents, or 2.1%.
Brent crude is set to end June with a third consecutive monthly gain after major global producers extended an unprecedented 9.7 million barrels per day supply cut agreement into July, while oil demand improved after countries across the globe eased lockdown measures.
However, global coronavirus cases exceeded 10 million on Sunday as India and Brazil battled outbreaks of over 10,000 cases daily. New outbreaks are reported in countries including China, New Zealand and Australia, prompting governments to impose restrictions again.
“The second wave contagion is alive and well,” Howie Lee, an economist at Singapore’s OCBC bank, said. “That is capping the bullish sentiment that we’ve seen in the last six to eight weeks.”
Other factors restricting oil prices’ advance at this stage include poor refining margins, high oil inventories and the resumption of U.S. production, Lee said.