SINGAPORE (Bloomberg) --Oil edged below $40 a barrel as OPEC+ producers started supplying more crude to a global market where many countries are still struggling to contain the coronavirus.

The Organization of Petroleum Exporting Countries and its allies will pump about 1.5 million barrels a day more this month than in July as it starts to unwind its historic virus-driven output curbs, with Russia already having lifted its output sightly last month. At the same time, diesel sales in India were down 21% on the previous year in July, a sign of the stuttering demand recovery in one of the world’s largest consumers.

Oil has been stuck in a narrow band since June, with rising coronavirus infections raising concerns about a renewed hit to demand. It’s a precarious time for producers to be adding more supply to the market, with Royal Dutch Shell Plc and Exxon Mobil Corp. predicting there may not be a full demand recovery until next year.

“As OPEC+ begins to raise its production, the economic outlook is still uncertain and largely tied to the evolution of the Covid-19 virus,” said Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas SA. “Concerns appear to be developing that a rise in OPEC+ production will coincide with an uneven recovery in oil demand.”

Prices:

West Texas Intermediate for September delivery fell 1.2% to $39.78 a barrel as of 10:32 a.m. London time

Brent for October settlement slipped 0.9% to $43.11 a barrel

The increase in supply comes as virus cases accelerated in California, a lockdown is being reimposed in Manila, and Australia’s second-biggest city instituted a curfew to stem the spread. In the U.S., Marathon Petroleum Corp., the largest American independent oil refiner said it won’t restart two refineries in California and New Mexico amid concerns demand for fuels is unlikely to hit pre-pandemic levels this year.

Meanwhile, tensions between Washington and Beijing continued to simmer, with U.S. Secretary of State Michael Pompeo flagging measures against “a broad array” of Chinese-owned software deemed to pose national-security risks.

Other oil-market news:

Wall Street expected Exxon Mobil Corp. and Chevron Corp. earnings to be bad, but not this bad. America’s biggest energy companies delivered their worst set of quarterly results of the modern era.

Seven & i Holdings Co. agreed to buy Marathon Petroleum Corp.’s Speedway gas stations for $21 billion, betting that an expanded U.S. footprint will deliver growth amid the uncertainty of the pandemic.

Tropical Storm Isaias strengthened slightly as it moved past Florida’s coast and it could become a hurricane again as it nears the Carolinas. It will then push over the mid-Atlantic into New York and New England.