AGL 8.30 Decreased By ▼ -0.03 (-0.36%)
ANL 10.95 Increased By ▲ 0.25 (2.34%)
AVN 79.70 Increased By ▲ 1.51 (1.93%)
BOP 5.75 Increased By ▲ 0.18 (3.23%)
CNERGY 5.64 Increased By ▲ 0.26 (4.83%)
EFERT 79.36 Increased By ▲ 0.71 (0.9%)
EPCL 67.48 Decreased By ▼ -0.31 (-0.46%)
FCCL 14.89 Increased By ▲ 0.39 (2.69%)
FFL 6.70 Increased By ▲ 0.10 (1.52%)
FLYNG 7.16 Increased By ▲ 0.13 (1.85%)
GGGL 11.60 Increased By ▲ 0.26 (2.29%)
GGL 17.51 Increased By ▲ 0.27 (1.57%)
GTECH 8.35 Increased By ▲ 0.05 (0.6%)
HUMNL 7.17 Increased By ▲ 0.11 (1.56%)
KEL 3.14 Increased By ▲ 0.06 (1.95%)
LOTCHEM 35.20 Increased By ▲ 2.33 (7.09%)
MLCF 28.35 Increased By ▲ 0.05 (0.18%)
OGDC 87.70 Increased By ▲ 3.15 (3.73%)
PAEL 16.63 Increased By ▲ 0.18 (1.09%)
PIBTL 6.05 Increased By ▲ 0.20 (3.42%)
PRL 19.46 Increased By ▲ 1.34 (7.4%)
SILK 1.14 No Change ▼ 0.00 (0%)
TELE 11.41 Increased By ▲ 0.31 (2.79%)
TPL 9.20 Increased By ▲ 0.20 (2.22%)
TPLP 20.25 Increased By ▲ 0.37 (1.86%)
TREET 27.10 Increased By ▲ 0.48 (1.8%)
TRG 96.20 Increased By ▲ 1.70 (1.8%)
UNITY 20.85 Increased By ▲ 0.48 (2.36%)
WAVES 13.90 Increased By ▲ 0.27 (1.98%)
WTL 1.34 Increased By ▲ 0.03 (2.29%)
BR100 4,275 Increased By 67 (1.59%)
BR30 15,794 Increased By 348.3 (2.26%)
KSE100 42,872 Increased By 628.4 (1.49%)
KSE30 16,219 Increased By 247.6 (1.55%)
Markets

Oil plunges more than 6pc on concerns over Europe curbs, rollouts

  • Nearly a third of France entered a month-long lockdown on Saturday following a jump in cases in Paris and parts of northern France.
Published March 23, 2021 Updated March 24, 2021

NEW YORK: Oil prices fell more than 6pc on Tuesday, tumbling as concerns over new pandemic curbs and slow vaccine rollouts in Europe compounded additional crude volumes.

Brent crude futures were down $3.70, or 5.7pc, at $60.94 a barrel by 2:13 p.m. ET (1816 GMT), having hit a low of $60.50 a barrel. West Texas Intermediate crude (WTI) was down $3.62, or 5.8pc, at $57.94, after falling to as low as $57.32.

Both benchmarks traded near lows not seen since Feb. 9.

The front-month Brent spread flipped into a small contango for the first time since January. Contango is where the front-month contracts are cheaper than future months, and could encourage traders to put oil into storage.

"The road to oil demand recovery appears to be full of obstacles as the world continues to fight the COVID-19 pandemic," said Bjornar Tonhaugen, head of oil markets at Rystad Energy.

"Oil prices are declining again on Tuesday, proving that last week's correction was not deep enough and that the market had been trading lately with an excessively bullish sentiment, overlooking the pandemic's risk."

Extended lockdowns in Europe are being driven by the threat of a third wave, with a new variant of the coronavirus on the continent.

Germany, Europe's biggest oil consumer, is extending its lockdown until April 18.

Nearly a third of France entered a month-long lockdown on Saturday following a jump in cases in Paris and parts of northern France.

"The German situation kicked it off, but there's a lot of crude oil out there," said Bob Yawger, director of energy futures at Mizuho in New York. "There is no flipside to the oil inventories. We are awash in oil."

U.S. crude inventories from the Energy Information Administration are due to be released Wednesday.

The data is expected to show a slight draw in the latest week, but gasoline stockpiles are expected to rise, according to analysts in a Reuters poll.

A stronger U.S. dollar also weighed on prices. As oil in priced in U.S. dollars, a stronger greenback makes oil more expensive for holders of other currencies.

Physical crude markets are indicating that demand is lower, much more so than the futures market.

"Physical prices have been weaker than futures have been suggesting for several weeks now," said Lachlan Shaw, head of commodity research at National Australia Bank.

Comments

Comments are closed.