Oil extends losing run on record-breaking virus cases in India

Source: iStock

West Texas Intermediate slipped 0.6 per cent following a 2.1 per cent decline on Wednesday, when U.S. government data showed the first increase in crude stockpiles in a month.

In India, coronavirus cases have topped 300,000 a day, the biggest jump globally, endangering consumption.

While demand remains robust in some parts of the world – notably the U.S. – the market is increasingly concerned about the scale of the Indian outbreak. And on the supply side, traders are watching the potential for a relaxation of American sanctions on Iran, though the U.S. has talked down the prospect of an imminent deal. These factors have helped push WTI back down toward $60.

“The untamed virus in certain parts of the world, coupled with a negative U.S. inventory report and the progress in the Iranian nuclear talks, has made oil bulls careful and conservative,” said Tamas Varga, an analyst at PVM Oil Associates.

Prices

  • WTI for June delivery fell 0.6 per cent to $60.98 a barrel at 10:03 a.m. London time
  • Brent for June settlement also dropped 0.6 per cent, trading at $64.93

Even as India is facing a crisis, other countries are mapping out plans to open up in a potential boost to oil demand. Among them, France will lift curbs on regional movement and reopen schools in the coming weeks, and Greece will ease most lockdown measures in May before welcoming back tourists.

In Libya, more output has been halted amid a budget dispute between the government and the national oil company. The government decided on Wednesday to transfer 1.05 billion dinars ($234 million) to the state producer, potentially easing some of the funding problems.

© 2021 Bloomberg L.P.

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