Oil prices recorded a third consecutive day of losses over fears that energy demand in the world’s biggest economy is cooling off, as well as the impact of suspended use of COVID-19 vaccines in Europe, which kept oil traders on their toes.
The leading European nations which include Germany, France, and Italy recently suspended usage of the AstraZeneca /University of Oxford COVID-19 vaccine over rising concerns about possible side effects. Others including Ireland and the Netherlands, have already suspended usage.
Oil traders anticipate such delays in COVID-19 vaccine usage could potentially delay economic recovery from the COVID-19 virus and adversely affect energy demand.
At the time of this publication, Brent crude was down by about 0.80% trading at $68.34 a barrel, and WTI futures plunged by 0.75% to trade at $64.90 a barrel.
Stephen Innes, Chief Global Market Strategist at Axi in a note to Nairametrics, spoke on the prevailing macros oil traders are persistently focused on.
“Oil rallied in Asian trading hours Monday to trade just above USD70 a barrel on robust Chinese data but weakened during the European morning as the market veered risk-off after Germany said they would suspect Astra Zeneca vaccinations.
“Oil price took the Astra Zeneca terrible medical headlines in stride.
“Still, with limited new fundamental news and sentiment currently mired in consolidation mode after the recent month to month tidy moves, traders find they have too much time on their hands and are now focusing on broader supply concerns like OPEC fractures, the return of shale, and Iranian barrels coming back to markets.”
What to expect: The main concern for the recovery in crude prices has been the risk of a fracturing of OPEC+ cohesion as market conditions improved, given how much supply was (and is) still curtailed.