Oil prices fell more than 7% on Thursday, recording the biggest one-day drop since September, as traders weighed signs that demand in Europe could falter and data showing that crude it continues to be abundant.
U.S. crude oil prices ended the day down 7.1%, to $ 60 a barrel, after its fifth consecutive daily decline. The slide stops what had been an almost uninterrupted increase since the beginning of the year. Even with the fall on Thursday, oil continues to rise nearly 25 percent in 2021. It hit a two-year high above $ 66 earlier this month.
Energy markets have reversed course this week, with investors worried that a rugged deployment of coronavirus vaccines in Europe and rising cases in parts of the world could lead to precaution among consumers and weaken fuel demand. Although the European Union health agency said on Thursday that a vaccine produced by AstraZeneca PLC was safe, many analysts still expect the recovery in fuel demand to be bumpy.
France on Thursday announced a new blockade in the Paris region. Germany and France suspended the use of the AstraZeneca vaccine earlier in the week, aggravating existing concerns that the region’s economy could lag behind the rest of the world.
Some traders are also concerned that demand in Asia, which has been steady lately, could disappoint due to border closures and other restrictions.
And while massive cuts in oil supplies from major producers like Saudi Arabia have raised prices, Thursday’s slide showed growing recognition that demand won’t be strong enough to make them much higher. higher than their current rank, traders said. Some investors in recent weeks had considered the possibility of a “supercycle” of raw materials that could bring much higher fuel prices and compress consumers to the gas pump.
“The rhetoric of the ‘super’ oil price cycle is finally becoming a little more reality,” Louise Dickson, an oil markets analyst at Rystad Energy, said in a statement.
Brent crude, a global indicator of oil prices, ended the day with a 6.9% drop to $ 63.28 a barrel, also equaling part of its recent rise.
In another sign, oil is still plentiful, U.S. crude oil stocks rose during the week ended March 12 and are about 6% above their five-year average levels at this time of year. , the Energy Information Administration said on Wednesday. Energy markets continue to heal after the recent freeze in Texas, which reduced the amount of oil captured by refineries. Refineries take crude oil and convert it into other energy products.
And the International Energy Agency said in its latest monthly report this week that global inventories and oil supplies remain plentiful, easing some concerns about possible shortages and a prolonged rise in fuel prices affecting consumers at the pump.
Despite the recent fall in oil prices, many analysts expect the Organization of the Petroleum Exporting Countries and their allies to continue to reduce production to keep crude around its current levels.
Write to Amrith Ramkumar at [email protected]
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It appeared in the March 19, 2021 print edition as “Crude Drops 7% on Worry Over Vaccine Woes.”