There are concerns that the second wave of Covid-19 infections across the world could stall fuel demand recovery, causing oil prices to edge-down.
The fuel demand concerns outweighed tighter supplies from OPEC producers.
Reuters reported that Brent crude was down by $0.10 or 0.2% to reach $42.04 a barrel, while US West Texas Intermediate (WTI) crude futures were down $0.11 or 0.3%, to touch at $39.72 per barrel.
Both the benchmarks rose by about 9% last week.
“The market has entered a slight backwardation up to October. It times in with some of our estimates that by around November, the market could get really tight.”, Singapore OCBC Bank economist Howie Lee was quoted by the news agency as saying.
“I find it more difficult for oil to move higher at this point, especially with the growing concern about second-wave contagion.”
In Canada and the US, the number of operating oil rigs fell to a record low last week that ended on 19 June, despite higher oil prices prompting some producers to commence drilling again.
The Organization of the Petroleum Exporting Countries (OPEC), including Russia and other producers, together known as OPEC+, has been curbing supply by approximately 9.7Mbpd since 1 May.
Earlier this month, the group also agreed to extend output cuts until the end of next month.
The group is yet to decide on an extension of supply cuts for a fourth month in August.
During an OPEC+ panel on 18 June, Iraq and Kazakhstan have announced their plans for oil production cuts to compensate for overproduction in May.