SULAIMANI (ESTA) — Oil prices rose on Wednesday, but the recovery was stunted by fears of a slow recovery in demand due to new pandemic lockdowns in Europe and a build in U.S. crude stocks.
Brent crude futures rose 21 cents to $61.12 a barrel by 0630 GMT, after tumbling 5.9% and hitting a low of $60.50 the previous day.
West Texas Intermediate (WTI) crude futures climbed 26 cents to $58.02 a barrel, having lost 6.2% and touched a low of $57.32 on Tuesday.
Both benchmarks touched their lowest levels since early February on Tuesday and have now fallen nearly 15% from their recent highs earlier this month, according to Reuters.
The front-month spread for both Brent and WTI slipped into contango, where front-month contracts are lower than the later months, a sign that demand for prompt crude is declining.
“Investors adjusted positions from Tuesday’s sharp selloff,” Kazuhiko Saito, chief analyst at commodities broker Fujitomi Co, told Reuters.
“But the market sentiment remained bearish due to growing concerns about demand recovery in the wake of new pandemic curbs in Europe,” he said.
Germany, Europe’s biggest oil consumer, extended its lockdown to April 18, and Chancellor Angela Merkel urged citizens to stay at home for five days over the East holiday.
Adding to pressure, U.S. crude oil stocks jumped by 2.9 million barrels in the week to March 19, according to trading sources citing data from industry group the American Petroleum Institute.
