Oil prices drop for third straight day
Increasing stockpiles in the US are adding to the risks to a demand recovery
London — Oil prices dropped on Tuesday, extending declines to three consecutive days, as rising stockpiles in the US added to the risks to a demand recovery after countries including Germany and France halted Covid-19 vaccinations.
Brent crude was $1.03, or 1.5%, lower at $67.85 by 10.02am GMT. US crude was down 96c, or 1.4%, at $64.43 a barrel.
Germany, France and Italy plan to suspend AstraZeneca’s Covid-19 vaccinations after reports of possible serious side effects, although the World Health Organisation said there was no established link to the vaccine.
These moves are deepening concerns about a slow pace of vaccinations in the EU, 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 seen 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 February’s “big freeze”, which halted refining operations that have taken time to fully return.
“Short-term direction will be set by the weekly US inventory reports,” PVM analysts said in a note, adding the strength of the dollar against other currencies was weighing on oil prices.
The American Petroleum Institute, an industry group, is due to 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 gains.
Crude inventories increased by 12.8-million barrels in the week to March 5, against analysts’ expectations for a rise of less than one-million barrels.
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