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March 24, 2021

Oil prices steadies as third wave of Covid sweeps Europe

Crude oil prices have steadied after the third Covid wave in mainland Europe dented recovery in prices following the previous day’s decline and increase in the US crude stocks raise fears of oversupply.

By Umesh Ellichipuram

Crude oil prices have steadied after the third Covid wave in mainland Europe dented recovery in prices following the previous day’s decline and increase in the US crude stocks raise fears of oversupply.

Brent crude futures increased by $0.27, or 0.4%, to reach $61.06 a barrel while the West Texas Intermediate (WTI) crude futures edged up by $0.19, or 0.3%, to $57.95 a barrel, reported Reuters.

Commodities broker Fujitomi chief analyst Kazuhiko Saito was cited by the news agency as saying: “Investors adjusted positions from Tuesday’s sharp selloff but the market sentiment remained bearish due to growing concerns about demand recovery in the wake of new pandemic curbs in Europe.”

Europe’s biggest oil consumer Germany has extended its lockdown to 18 April to contain the virus spread.

Concerns have also been raised over the recovery pace from the pandemic after a US health agency said the data of the vaccine developed by AstraZeneca and Oxford University may have included outdated information.

In the week ending 19 March, US crude oil stocks soared by 2.9 million barrels against analysts’ expectations for a decline of approximately 300,000 barrels in a Reuters’ poll.

Meanwhile, US gasoline stocks dipped by 3.7 million barrels, compared to an estimated increase of 1.2 million barrels.

Adding to market concerns, the US, Europe and the UK have imposed human rights sanctions on China. This in turn prompted reactive sanctions from the Asian country.

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