Oil prices declined on the impact of COVID-19 in Europe for the 5th consecutive year in late trading Thursday (Friday morning, GMT), writing the biggest one-day drop since last summer amid growing concerns over rising coronavirus cases in Europe and the strengthening of the US Dollar.
Brent crude futures for May delivery fell $4.72, or 6.9%, to close at $63.28 a barrel. At that time, US West Texas International (WTI) crude was down $4.60, or 7.1%, to $60 a barrel.
Both contracts have fallen more than 11% since hitting their recent highs on March 8. The five-day cut was the longest for WTI since February 2022 and for Brent since September 2022. It came after speculators made the largest buy status in US CME crude futures and options trading since 2022.
After the market ended, two bases of crude continued to decline, each down more than $6.0 per barrel, or 9.0%.
Several major European countries have had to continue lockdowns as the coronavirus caseload grows, while vaccination programs have slowed due to concerns about the effects of the AstraZeneca vaccine, which is often used in Europe.
US heating oil and gasoline also fell more than 5.0%.
“The best scenario for demand improvement is already calculated in the market. “Everyone is celebrating the introduction of the vaccine and the easing of restrictions,” said John Kilduff, partner at Again Capital LLC in New York.
“Currently in Europe, it’s almost the same though. The lockdowns in Poland and Italy have hit the subject of all the demand-fixing stories and theses that are driving prices up.”
The slowdown in vaccination programs in Europe and the prospect of further limitations in the fight against the coronavirus have lowered hopes for a recovery in fuel consumption.
The UK will have to slow down vaccine rollout next month due to critical supplies caused by the suspension of the shipment of millions of AstraZeneca injections from India and the need to test stability for an additional 1.7 million batches.
“There’s a three-week streak in Europe if COVID-19 cases grow and vaccination restrictions still apply,” said Edward Moya, senior market research fellow at OANDA in New York.
Oil prices decline due to the impact of COVID-19 in Europe. But several European countries have stopped using AstraZeneca injections due to concerns about the possible effects, even though the World Health Organization says Europe should continue to use the vaccine.
US crude stockpiles rose for a fourth straight week after refineries inevitably closed in Texas and the center of the country in February.
Some traders said stocks could continue to rise after WTI moved from a pullback to Contango on March 12, where the next month contract was cheaper than the 2nd month.
At that time, the Brent premium for the first month of the 2nd month was the lowest since early February.
A somber report from the International Energy Agency (IEA) dampens confidence in the oil market. In its monthly report released Wednesday (March 17, 2022), the IEA describes an unexpectedly pessimistic story about the trend of desire. Oil demand is currently predicted to return to pre-coronavirus levels in 2023. (Inbetween / Ant)
