Coronavirus impact on crude oil price
Oil prices fell on Thursday, cutting recent gains, as new lockdowns and the emergence of new variants of the coronavirus weighed on the prospect of a rapid recovery in demand.
* At 0947 GMT, Brent crude was down 28 cents, or 0.5%, at $ 61.19 a barrel, while US West Texas Intermediate oil was down 25 cents, or 0.4%, to 58. , 43 dollars.
* Benchmark Brent had risen in the previous nine sessions, its longest sustained earnings period since January 2019. Wednesday was the eighth day of WTI gains.
* “Recovery in demand is hampered by mutant viruses and intermittent distribution of vaccines,” said PVM Oil analyst Tamas Varga.
* The International Energy Agency (IEA) said on Thursday that global oil supply continues to outstrip demand due to lockdowns from COVID-19 and the spread of variants of the virus.
* “Forecasts for economic growth and oil demand depend largely on progress in the distribution and administration of vaccines, and the easing of travel restrictions in the world’s major economies,” said the IEA.
* The market has rallied recently, amid reduced pumping by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, a group known as OPEC +, and Saudi Arabia’s promise to make additional voluntary cuts.
* The IEA said, however, that a rapid decline in inventories expected in the second half of the year could set the stage for OPEC + to begin reducing its cuts.
* Crude prices faced further pressure after the end of the blockade by the Libyan Oil Facility Guards at the port of Hariga. The strike in Hariga started last month and contributed to a decline in Libyan oil production.
* However, US crude inventories fell last week for the third week in a row, falling 6.6 million barrels to 469 million barrels, the lowest level since March, the Energy Information Administration said. Analysts polled by Reuters expected an increase of 985,000 barrels.