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Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

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Oil Plunges On A Wave Of Bearish News

Oil prices plummeted by 4 percent on Thursday morning, as a rising U.S. dollar, rising U.S. crude inventories, and fresh setbacks in vaccination programs in Europe weighed on the market.

As of 11:45 a.m. EDT, WTI Crude prices were dropping by 4.20 percent at $61.89, and Brent Crude was plunging by 3.91 percent at $65.34.

Oil prices were down for a fifth consecutive trading day, as the recent rally began to unwind with a continued increase in U.S. commercial inventories, a stronger U.S. dollar, and renewed concerns about demand this quarter and early next quarter amid setbacks in vaccination rollouts in the biggest economies in Europe.

The higher dollar has weighed on the oil market this week as a stronger greenback makes crude oil more expensive for holders of other currencies.

Adding to the bearish sentiment, the Energy Information Administration reported on Wednesday a crude oil inventory build of 2.4 million barrels for the week to March 12.

The EIA inventory report showed that U.S. commercial crude oil inventories rose above 500 million barrels for the first time this year, ING analysts commented.

On another bearish note for demand, more than a dozen countries in Europe are still suspending the AstraZeneca shot over concerns about blood clots, even though the World Health Organization (WHO) said on Wednesday, “At this time, WHO considers that the benefits of the AstraZeneca vaccine outweigh its risks and recommends that vaccinations continue.”

One of the best performers in vaccinations in Europe so far, the UK, warned today of a “significant reduction in the weekly supply” of vaccines in England from April. According to the BBC, some supply of AstraZeneca vaccines – which the UK continues to use – could be delayed because of issues related to a manufacturer in India. More disruptions to vaccination schedules and slower vaccination rates could mean a slower return to some sort of normal consumer behavior and travel to other countries.  

By Tsvetana Paraskova for Oilprice.com

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  • Mamdouh Salameh on March 18 2021 said:
    This is a temporary hiccup in the surge of crude oil prices caused overwhelmingly by concern about a slowdown in the vaccination campaign in the European Union (EU) and its impact on the return of the global economy to normal business activities.

    Some EU countries are suspending the use of the AstraZeneca vaccine over concerns about blood clots despite the WHO saying that its benefits outweigh its risks.

    Soon these concerns will subside with the bullish factors in the market overpowering this bearish factor thus enabling oil prices to resume their surge.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London
  • Chris Willson on March 18 2021 said:
    WTI and Brent ran up wasn't based on supply/demand. It is biased by arbitrary OPEC+ and Saudi production cut. That is an evil act to hurt other for own gain. Brent would be below $40/barrel if purely based on supply/demand. Higher price will encourage import countries like India and China to step up spending for other renewable energy. Oil will go below $10 in 5 years.
  • naveen sreedevan shitijibes unilever on March 18 2021 said:
    every time crude price rise, the culprits of america will say"there is sudden over supply'
    i suppose energy.gov is mixing up data about TAP beer supply from Coors light.
  • Rohan Silva on March 20 2021 said:
    I agree with comments of Dr. Mamdouh Salameh. It is only a temporary set back of oil price. The factor of economic recovery from COVID impact over weigh all other concerns.
  • Joe Blow on March 23 2021 said:
    Even before covid oil demand was sluggish and with the US in the middle as a swing provider we won't see run ups like we had in 2007-2008. These wildcat producers have shown they can counter Saudi Aramco. Luckily not every bit of US production in on federal lands so Biden can't shut them down.

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