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Hazloc Heaters
Hazloc Heaters

Oil Slides Amid Uneven Recovery in Global Consumption


By Saket Sundria and Alex Longley

(Bloomberg) Oil slipped below $69 a barrel as traders assessed an uneven recovery in global demand.Global benchmark Brent has struggled for momentum after failing to break above $70 a barrel on Wednesday. While major crude importer India is battling a record coronavirus wave that’s sapped economic activity, there are signs of rising oil consumption elsewhere. Spain’s Cepsa is restarting a processing unit that was previously idled, while U.S. plants are running at five-year average levels for the first time since the pandemic began.

Oil eases from near $70 amid concerns over uneven demand recovery

Oil has rallied in 2021 as key economies including the U.S. and China rebound from the impact of the pandemic, fanning energy demand. The strength in crude forms part of a broad advance in raw materials, with the Bloomberg Commodity Spot Index surging to the highest level in almost a decade. Still, the outbreak in India has rapidly worsened since the start of April, and the country is now reporting more than 350,000 cases every day.

“Prices flirt with the $70 mark, but fail to push higher,” said Hans van Cleef, senior energy economist at ABN Amro. “From a fundamental perspective we have demand uncertainties and a lot of OPEC+ spare capacity to meet any rise in demand.”

Prices:
  • Brent for July settlement was 0.3% lower at $68.75 at 8:51 a.m. in New York.
  • WTI for June delivery was down 0.4% at $65.35 a barrel

Elsewhere, in Japan a state of emergency brought on by Covid will be extended until the end of the month, local media reported. The country’s capital, Tokyo, had wanted to extend it in a bid to stem a surge in infections ahead of hosting the Olympics from July.

Prices have also run into technical hurdles in recent days, trading above their upper Bollinger bands intraday, before subsequently retreating. That could prove to be a sign that the current rally may be due for a pause.

Related news:
  • The dislocation of key crude benchmarks is providing a snapshot of the uneven demand recovery unfolding across global markets.
  • With the world in the midst of a commodities boom, some in the oil market are gearing up for $100-a-barrel crude.
  • Surging oil futures are set to test a promise by Petrobras’ new chief to keep diesel prices at parity with the international market.


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