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Oil slips for fourth day on Europe demand concern, IEA report

CommoditiesMar 17, 2021 09:22AM ET
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© Reuters. FILE PHOTO: A sticker reads crude oil on the side of a storage tank in the Permian Basin

By Alex Lawler

LONDON (Reuters) - Oil slipped for a fourth day on Wednesday as concerns about weaker demand in Europe outweighed an industry report that showed U.S. crude inventories unexpectedly fell last week.

Several European countries have paused the use of AstraZeneca (NASDAQ:AZN)'s COVID-19 vaccine due to worries over possible side effects. Germany is seeing rising coronavirus cases, while Italy is imposing a nationwide Easter lockdown.

Brent crude fell $1.00, or 1.5%, to $67.39 a barrel by 1310 GMT. U.S. West Texas Intermediate (WTI) crude dropped 72 cents, or 1.1%, to $64.08.

"The suspension will not do the bloc's economic and fuel recovery any favours," said Stephen Brennock of oil broker PVM. "The hope now is that Europe can get its sluggish vaccine rollout back on track."

Oil also fell after the release of the latest reports from the International Energy Agency, which said a supercycle was unlikely, demand won't return to pre-pandemic levels until 2023 and could peak earlier than previously thought.

"IEA's report has triggered an action among oil traders," said Naeem Aslam of Avatrade. "We have seen some selling."

Still, oil has recovered from historic lows reached last year as demand collapsed, partly due to record oil output cuts by OPEC and its allies. Brent reached $71.38 on March 8, its highest since Jan. 8, 2020.

The market gained support from American Petroleum Institute data, which according to trading sources said U.S. crude inventories fell by 1 million barrels last week. Analysts had expected a rise.

Traders will be looking to the official U.S. Energy Information Administration report at 1430 GMT for confirmation of the API figures.

Investors are also looking to the results of the U.S. central bank's Federal Open Market Committee meeting. No policy shift is expected.

A rising dollar ahead of the Fed's announcement was also a headwind for oil, as a stronger dollar makes crude more expensive for other currency holders.

Oil slips for fourth day on Europe demand concern, IEA report
 

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Comments (6)
Alan Rice
Alan Rice Mar 17, 2021 12:42PM ET
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Planet Earth: AUTO-destructing ??
cedric vil
Ced971 Mar 17, 2021 10:21AM ET
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55 USD / barrel in H2 - All Oil suppliers will fight for market share and pump like mad !
Vlad Lozovskiy
Vlad Lozovskiy Mar 17, 2021 8:28AM ET
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Because of Bidens bad failures with oil.  Mass media keep repeating like a parrot that oil is going down, hoping it becomes true.  But it will not.
Eudon Hickey
Eudon Hickey Mar 17, 2021 4:03AM ET
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The rumour has it, that if you can't get a job at McDonalds, you become a journalist at Reuters/ CNN/ MSNBC, ABC, CBS....as nothing is based on facts/ truth.
Javier Escamilla
Javier Escamilla Mar 17, 2021 3:25AM ET
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Next week the article will be in regards to “an unexpectable increase” such reports are unreliabale
perplexed76 .
perplexed76 . Mar 17, 2021 2:19AM ET
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there's no drop before official data come.
 
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