On Tuesday, both US and Brent crude futures foundered as much as 6 per cent, as worries seemed to be mounting over renewed pandemic lockdown measures alongside a lethargic vaccination roll out largely driven by Europeans’ reluctance to AstraZeneca’s pandemic vaccine candidate which it had developed in collaboration with the Oxford University, while a UK health authority remark last week that said the Kingdom might need to curb out its exports of pandemic vaccines due to a supply chain issue, added further strains.
In factuality, a day earlier, France had reimposed lockdown on 16 regions across the country, while Netherlands alongside other major economies in the 26-member bloc had tightened up the belts of a pandemic-led restriction.
More interestingly, as both black gold benchmarks had been bottomed to their lowest levels since February 9, front-month Brent crude had met with a contango for the first time since early-2021, while front month Brent crude oil prices became cheaper than those of futures, eventually opening up a potential window of opportunity for traders to hoard up crude oils which in effect could lead to a robust build in UK crude stockpiles and tatter the contracts’ prices further.
Crude oil plunges as Europe reimposes stiffer lockdowns
Citing statistics, in the day’s commodity market wind down, UK crude futures’ prices pummelled as much as 5.7 per cent to $60.94 a barrel after hitting a session low of $60.50 per barrel earlier in the day, while US WTI (West Texas Intermediate) crude oil futures’ prices had wrapped up the day 5.8 per cent lower to $57.94 per barrel after nosediving to a session low of $57.32 a barrel.
Meanwhile, referring to an evaporation of hopes of a near-term recovery in crude oil demands, a head of oil markets in Rystad Energy, Bjornar Tonhaugen said, “The road to oil demand recovery appears to be full of obstacles as the world continues to fight the COVID-19 pandemic. ”