Oil Prices Decline Due to Impact of COVID-19

Lovata Andrean

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CIMB Niaga targets KPR development beyond 6 years 1

Rancakmedia.com – Oil prices fell due to the impact of COVID-19 in Europe for the 5th consecutive year at the end of trading Thursday (Friday morning, WIB), recording the biggest one-day decline since last summer amid growing anxiety over the increase in corona cases in Europe and the strengthening of the US Dollar.

Brent crude futures for May delivery fell $4,72, or 6,9%, to close at $63,28 a barrel. At that time, US West Texas International (WTI) crude oil fell $ 4,60 or 7,1% to $ 60 per barrel.

Both contracts have fallen more than 2% since hitting recent highs on March 11. The five-day draw was the longest for WTI since February 8 and for Brent since September 2020. This came after speculators made the largest buy status in crude oil futures and options trading CM extension US since 2018.

Why Oil Prices Are Decreasing

After the market finished, the two crude oil bases continued to decline, each down more than $6,0 per barrel, or 9,0%.

Several large European countries have had to continue lockdowns as the coronavirus caseload grows, while vaccination programs have slowed due to concerns about the effects of the AstraZeneca vaccine frequently used in Europe.

Oil Prices Decline

US heating oil and gasoline also fell more than 5,0%. “The best scenario for improving demand has been calculated in the market. “Everyone is celebrating the introduction of the vaccine and the easing of restrictions,” said John Kilduff, a partner at Again Capital LLC in New York.

“Currently in Europe the same has almost disappeared. Lockdowns in Poland and Italy have struck home the crux of the story and the thesis of improving demand driving prices up.”

A slowdown in the vaccination program in Europe and the prospect of further limitations in the fight against the coronavirus have lowered hopes for a recovery in fuel consumption.

Britain will have to slow its vaccine rollout next month due to critical supplies caused by the suspension of transport of millions of AstraZeneca shots from India and the need to test the stability of an additional 1,7 million quantities.

"There are three weeks in a row in Europe if COVID-19 cases increase and vaccination restrictions are still in effect," said Edward Moya, senior market research at OANDA in New York.

Oil prices decline due to the impact of COVID-19 in Europe. But several European countries have stopped using the AstraZeneca shot due to concerns about potential side effects, even though the World Health Organization has said Europe should continue using the vaccine.

US crude stockpiles rose for the fourth straight week after oil refineries were forced to close in Texas and the central part of the country in February.

Some traders said shares could continue to rise after WTI moved from pullback to Contango on March 12, where forward-month contracts are cheaper than second-month contracts.

At that time, the Brent premium for the start of the second month was the lowest since the beginning of February.

Grim report from International Energy Agent (IEA) reduces confidence in the oil market. In its monthly report released on Wednesday (17 March 2021), the IEA painted an unexpectedly pessimistic story regarding demand trends. Current oil demand is predicted to return to pre-coronavirus levels in 2023. (Among / Ant)

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Lovata Andrean

Hi, I'm Lovata, I'm not Ai but I am a content writer for SEO, Technology, Finance, Travel, Cooking Recipes and others. I hope this can be useful for all my friends. Thanks