Oil prices lost more than 3% at the second trading session of the week on concerns that new COVID-19 lockdown and slow vaccine rollouts in Europe will slow energy demand arbitrarily.
At the time of writing this report, West Texas Intermediate (WTI), crude futures plunged by over 3% to trade below $60 a barrel. The April contract expired on Monday at $61.55, up 13 cents from Friday, after plunging more than 6% last week.
The British-based oil contract, Brent crude futures also slumped by over 3% to $62.63, a barrel.
Oil traders are momentarily shorting oil futures on reports revealing Chancellor Merkel, leader of Europes biggest economy & other regional leaders agreed to put the country into hard lockdown over Easter to try to reverse a “third wave.
Good Morning from Germany where Chancellor Merkel & regional leaders agreed to put country into hard lockdown over Easter to try to reverse a “third wave.” All stores will be shuttered from April 1 for 5 days, except for food stores which will open on Apr3 https://t.co/UajRFLwtNO pic.twitter.com/M76L6QIHQB
— Holger Zschaepitz (@Schuldensuehner) March 23, 2021
Oil traders are currently undergoing a reality check on the account that oil energy demand still has a long way from a full demand recovery, and it’s the record levels of withdrawn production capacity that’s the main prop for the oil market.
So, having crested $70/ barrel on sentiments alone, prices were always vulnerable to a pull-back.