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Oil Dips With India & Canada Virus Cases Imperiling Demand Revival


These translations are done via Google Translate

April 8, 2021

(Bloomberg) Oil fell as bearish virus news from India to Japan underpinned the outlook for a staggered recovery in consumption.

West Texas Intermediate slid 0.6%, though remains within the $5 range it has traded in since mid-March. India, the world’s No. 3 oil importer, reported a record number of daily coronavirus cases, with states facing a vaccine shortage. In Ontario, officials issued a stay-at-home advisory, while the Tokyo government is weighing stricter curbs as a more contagious variant spreads.

WTI is now trading below its 50-day moving average

Crude has been stuck in a narrow band around $60 in recent weeks. While a string of positive economic figures, particularly from the U.S., has buoyed sentiment, fresh Covid-19 outbreaks and renewed lockdowns have acted as a counterweight. Against that mixed backdrop, the Organization of Petroleum Exporting Countries and its allies have announced a roadmap to ease output curbs over three months, restoring more than 2 million barrels a day.

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“The tug-of-war between short-term gloom and medium-term prosperity continues,” said Tamas Varga, an analyst at brokerage PVM Oil Associates. “The untamed rise in Covid-19 cases, on the other hand, caps every attempt to push prices significantly higher.”

Prices
  • WTI dropped 0.6% to $59.42 a barrel at 9:49 a.m. in London.
  • Brent lost 0.4% to $62.94 a barrel

With virus cases continuing to flare up in some parts of the world, the chances of a simultaneous reopening of the global economy over the northern-hemisphere summer have decreased, RBC Capital Markets analysts wrote in a report. Still, it’s possible that an easing of lockdowns could be phased around the world over the period, they said, aiding the market as fall approaches.

In India, state-run refiners are already looking to buy less crude from Saudi Arabia, with demand poised to dip amid the resurgence of Covid-19. Yet they’re also gearing up to buy Iranian crude if U.S. sanctions are eased.

Related news
  • As Europeans drive less, gasoline prices are rising as local refineries increase exports — but make less — of the fuel.
  • Global oil inventories will drop even as OPEC+ gradually lifts output, according to Australia & New Zealand Banking Group Ltd.
  • The White House is considering a pledge to cut U.S. greenhouse-gas emissions by 50% or more by the end of the decade.


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