Oil prices fell for the third day in a row on Tuesday as the third wave of coronavirus infections in Europe and slowing vaccine rollouts in the EU added to a stronger U.S. dollar to weigh on the market.
As of 10:23 a.m. EDT on Tuesday, WTI Crude prices had dropped below the $65 a barrel mark and were trading at $63.87, down by 2.29 percent on the day. The prompt Brent Crude price was also down, by 1.93 percent at $67.61.
While data from Asia and the United States point to a rebound in fuel demand, some major economies in Europe are headed toward a third wave of COVID-19 infections and new restrictions. Italy has announced in recent days a new nationwide lockdown through Easter weekend, while Germany admitted that it was in a third wave of rising cases.
Adding to those concerns about major European economies and oil demand in Europe, several EU nations, including the biggest—Germany, France, and Italy—suspended vaccinations with the AstraZeneca vaccine amid concerns of blood clots as potential side effects. Those concerns have yet to be reviewed by regulators, while the World Health Organization (WHO) says that there is no proven link between blood clots and the AstraZeneca shot.
The suspension of vaccinations with that particular vaccine created further chaos in the EU’s already chaotic vaccination program, which was lagging behind compared to other countries. Slower vaccinations, especially in affluent Western Europe, could delay a much-needed airline travel rebound as summer approaches so that global oil demand could rebound.
Brent prices continue to trade in a relatively tight range of $67 to $70, which “highlights the short-term risk of the market having reached a level from where current fundamentals are not yet strong enough to support further short-term strength,” Saxo Bank analysts said on Tuesday.
“While rising US bond yields and the stronger dollar has lowered investment appetite, these developments may also signal a stronger recovery in global demand is needed to justify even higher prices,” the analysts noted.
By Tsvetana Paraskova for Oilprice.com
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