Crude oil prices slipped amid concerns over surging US stockpiles and the threat to oil demand due to the halt of Covid-19 vaccinations by some European countries.
Brent crude dropped by $0.58, or 0.8%, to reach $68.30 while US crude fell by $0.61, or 0.9%, to settle at $64.78 a barrel, reported Reuters.
Following reports of stern side effects, AstraZeneca Covid-19 injections are planned to be suspended by some European countries, including Germany, France and Italy.
The plans come despite an announcement by the World Health Organization (WHO) that there was no established link between the side effects and the vaccine.
As a result, concerns are rising in Europe over a slow pace of vaccinations, which could delay potential economic recovery from the pandemic.
Although the pandemic has reduced the demand for oil, prices have recovered to levels prior to the global health crisis. However, the increase in prices is capped as slow vaccination rollouts in most countries.
Meanwhile, US stockpiles are rising due to the ‘big freeze’ in Texas last month, which affected refining operations. The refineries have taken time to fully resume operations.
ING Economics was cited by Reuters as saying in a client note: “Crude oil inventories have increased substantially in recent weeks as a result of US refinery disruptions, which have seen crude oil stocks approaching 500 million barrels.”
In the week ending 5 March, crude inventories increased by 12.8 million barrels against analyst expectations of a rise of fewer than one million barrels.