SULAIMANI (ESTA) — Oil prices extended losses on Tuesday on concerns that new pandemic curbs and slow vaccine rollout in Europe will slow a recovery in fuel demand.
Brent crude futures for May dropped by 68 cents to $63.94 a barrel 0702, while U.S. West Texas Intermediate (WTI) for May delivery fell 68 cents to $60.88 a barrel.
“[The declines] are to do with vaccine rollout issues and lockdowns in Europe,” Lachlan Shaw, National Australia Bank’s head of commodity research, told Reuters.
Reuters reported that Germany, Europe’s biggest oil consumer, is expected to extend restrictions on shopping and travel into April to contain a third wave of coronavirus infections, which has led economists to cut their growth forecasts.
Extended lockdowns are being driven by the threat of a third wave of infections, with a new variant of the virus on the continent.
“This is heightening fears that the pessimistic forecasts from both the International Energy Agency and the EIA [Energy Information Administration] recently could eventuate,” Reuters quoted ANZ Research as saying.
The Paris-based IEA last week cut its forecast for crude demand in 2021 by 2.5 million barrels per day, while the EIA forecast global oil supply would surpass demand in the second half of 2021.
Physical crude markets are indicating that demand is lower much more than the futures market, according to Reuters.
