MELBOURNE (Reuters) – Oil prices fell 1% on Tuesday amid concerns that new pandemic loops and a slow vaccination rollout in Europe will delay fuel demand and as producers cut prices, reflecting insufficient oil supply.
U.S. West Texas Intermediate (WTI) crude futures for delivery in May fell 62 cents, or 1%, to $ 60.94 a barrel at 0149 GMT. The April contract ended Monday at $ 61.55, up 13 cents from Friday, after falling more than 6% last week.
Brent crude times for May fell 68 cents, or 1.1% to $ 63.94, offsetting a 9 percent gain in the prior session.
“(The declines are) related to vaccine distribution and lock-up issues in Europe,” said Lachlan Shaw, head of product inspection at the National Bank of Australia.
Germany, Europe’s largest oil consumer, is expected to extend restrictions on purchase and travel into April to cover the third wave of COVID-19 infections, which have forced economists cut their growth projections.
Expanded locks are driven by the threat of a third wave of diseases, with a new version of the virus on the continent.
“This raises fears that the optimistic predictions from both the International Energy Agency and the EIA (Energy Information Management) may emerge recently,” ANZ Research said in a note.
Last week the Paris-based IEA cut the forecast of crude demand in 2021 by 2.5 million barrels per day, while the EIA predicted that global oil supply would decline. exceed demand in the second half of 2021.
Corporate crude markets show much lower demand than the futures market.
Nigeria, Africa’s largest oil producer, on Monday cut its official retail prices for shipment in April, suggesting suppliers are trying to stimulate sales. Angola, the second largest producer on the continent and a major supplier in China, still has some April shipments, expressing a lack of interest from Chinese refiners.
“Corporate prices have been weaker than futures have been suggesting for several weeks now,” Shaw said.
U.S. crude stock collection data from the American Petroleum Institute will be released later Tuesday. Analysts estimate that U.S. crude deposits fell about 900,000 barrels a week to March 19 while brewing consumption rose 3.2 percent points, according to a Reuters poll.
Census data from the EIA, which is considered more accurate, will be released on Wednesday.
Reciting with Sonali Paul; Edited by Christian Schmollinger