Oil falls as stockpiling concerns rise
Tokyo — Oil prices fell on Tuesday, extending declines for a third day, as concerns about rising stockpiles in the US added to the threat to demand posed by countries including Germany and France halting Covid-19 vaccinations.
Brent crude was down 58c or 0.8%, at $68.30 by 1am GMT, having dropped 0.5% on Monday. US crude was down 61c or 0.9%, at $64.78 a barrel, after declining 0.3% in the previous session.
Germany, France and Italy plan to suspend AstraZeneca Covid-19 injections after reports of possible serious side effects, though the World Health Organization said there was no established link to the vaccine.
These moves are deepening concerns over a slow pace of vaccinations in the region, which may delay any economic recovery from the pandemic in one of the hardest-hit areas.
The pandemic eviscerated demand for oil but prices have recovered to levels before the global health crisis, only to be capped as vaccination rollouts have been slow in most countries.
In the US, stockpiles are also rising because of last month’s “big freeze” which halted refining operations that have taken time to fully return.
“Crude oil inventories have increased substantially in recent weeks, as a result of US refinery disruptions, which have seen crude oil stocks approaching 500-million barrels,” ING Economics said in a client note.
The American Petroleum Institute, an industry group, will report crude stock pile levels later on Tuesday, followed by official numbers from the department of energy on Wednesday, with analysts expecting another week of gain.
Crude inventories increased by 12.8-million barrels in the week to March 5, against analysts’ expectations for a rise of less than 1-million barrels.
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