Global crude oil prices dipped approximately 2% as demand concerns triggered by the third wave of the Covid-19 pandemic in Europe.

Concerns over demand recovery outweighed the fears of oil supply disruptions that emerged after a container ship blocked the key Suez Canal trade route.

Brent crude futures slipped by $1.14, or 1.8%, to reach $63.27 a barrel while the US West Texas Intermediate (WTI) crude futures reduced by $1.27, or 2.1%, to $59.91 a barrel, reported Reuters.

The grounded container ship had potentially blocked ten oil tankers in the Suez Canal, sharply reversing the drop in the oil price, according to the news agency.

The market was supported by data showing improved US gasoline demand and refinery run rates.

Commonwealth Bank commodities analyst Vivek Dhar was cited by the news agency as saying: “As much as those (Suez blockage and US demand) factors were there, it doesn’t really erase the demand concerns questions that were asked earlier this week.

“And while the focus was on Europe, we also have rising Covid-19 cases in places like India and Brazil, developing economies which are really critical to the story for sustainable oil demand growth.”

Meanwhile, India said it found a new ‘double mutant’ variant of the coronavirus. The country reported its highest tally of new Covid-19 infections and deaths in one day, which could further dent the demand outlook.

Four OPEC+ sources told Reuters that the Organization of the Petroleum Exporting Countries and allies (OPEC+) are expected to extend current supply curbs into May considering persistent fuel demand concerns and dipping prices, at a meeting scheduled on 1 April.