Crude oil prices are on a fifth-day losing streak amid reports from the world’s biggest economy showing a sustained rise in U.S. stockpiles, while the resurging COVID-19 virus clouded energy demand outlook.
At the time of writing this report, Brent crude futures were down by more than 0.6% to trade at $67.50 a barrel after losing 0.6% yesterday. West Texas Intermediate futures were also down by 0.4% to trade at $64.48 a barrel, having fallen 0.3% in the previous session.
Recent data reveal U.S. stockpiles have risen for 4 straight weeks after oil processing plants in key energy hubs were forced to shut down due to severe cold weather.
In an explanatory note to Nairametrics, Stephen Innes, Chief Global Market Strategist at Axi, spoke on the macros weighing hard on crude oil amid Europe’s suspension of COVID-19 vaccine uses on possible side effects.
“Oil prices that remain crimped by more countries in Europe suspending the use of the AstraZeneca vaccine didn’t get much help from the EIA data as US crude inventories built by 2.4 million barrels last week and are up 38 million barrels over the previous three weeks due to low refinery utilization following the winter freeze-off—walking back some of the more bullish for oil inferences from the API estimate the day prior.
“Given the patchy recovery where consumption is taking off in the US but struggling in parts of Europe and worldwide, sentiment could be catching down to the economic demand reality.”
What to expect
The omnipresent risk that OPEC+ could soften production curbs continues to provide a soft but remindful headwind.