Oil prices declined 1% as India’s COVID-19 crisis worsened
According to Thursday’s data, oil prices declined 1% as India’s COVID-19 crisis worsened, halting a rally that had lifted crude to an eight-week peak after the IEA and OPEC forecast a recovery in global demand.
Brent crude dropped by 74 cents, which equals 1.1%, and traded at $68.58 a barrel after gaining 1% on Wednesday. Meanwhile, West Texas Intermediate (WTI) dipped 75 cents, or 1.1%, and settled at $65.33 a barrel. In the previous session, it boosted by 1.2%.
According to Edward Moya, senior market analyst at OANDA, the path for crude prices seems to be higher. Still, until the situation improves in India, WTI will probably struggle to break above the early March high.
The International Energy Agency (IEA) announced that oil demand was already outstripping supply, and the shortfall was anticipated to rise even if Iran increased exports.
The Organization of the Petroleum Exporting Countries stuck to its outlook for a strong return of world oil demand in 2021. Moreover, growth in China and the United States countering the impact of India’s COVID-19 crisis.
It’s unknown when new infections will hit a plateau
However, global concern is growing about the situation in India, the world’s third-largest importer of crude, where a variant of the coronavirus has swept through the countryside.
Moreover, medical professionals cannot say for sure when new infections will hit a plateau. Other countries are alarmed over the transmissibility of the virus mutation that is now spreading across the world.
Furthermore, fuel shortages worsened in the southeastern United States, six days after the shutdown of the Colonial Pipeline, the biggest U.S. fuel pipeline network.
Colonial, which pumps over 2.5 million barrels per day of fuel, announced it hoped to get a large portion of the network operating by the end of the week.
According to Goldman Sachs analysts, as the disruption is meaningful for local retail markets, its impact is still likely to be temporary as there is no physical damage to the pipeline.
