Oil Climbs amidst Growing Concern in Europe, Sanctions
Oil climbs rose more than one per cent amidst uncertainties in European Countries and United States stock build and human right sanction in China.
Prices were driven upward as investors sought bargains following the previous day’s slump.
However, human rights sanctions on China imposed by the U.S., Europe and Britain, which prompted retaliatory sanctions from Beijing, adds to market concerns.
Crude prices have fallen significantly in recent trading sessions over demand fears following restrictions and lockdowns due to rise in the number of pandemic cases across Europe.
International benchmark Brent crude was trading at $61.70 per barrel today, rising at 1.49% after closing Tuesday at $60.79 a barrel.
American benchmark West Texas Intermediate (WTI) was at $58.45 per barrel at the same time, surge 1.19% increase after it ended the previous session at $57.76 a barrel.
Oil prices recorded sharp declines during the previous trade, with Brent falling by 5.93% and WTI by 6.16% mainly due to the rise in Covid-19 cases in Europe.
Oil traders, investors believe the development is likely to hit these economies again and curtail oil demand.
However, investors who took the opportunity to benefit from low oil prices have driven up demand in support of higher prices.
Many European countries are extending or renewing lockdown measures as a third wave of the pandemic sweeps the continent, fueled by more contagious new coronavirus variants.
European countries, including France, Germany and Italy, have announced strict new shutdowns.
France leads the number of cases above 4.3 million in the continent, while cases in Italy now total over 3.4 million, and Spain follows with over 3.2 million cases, according to data from Johns Hopkins University on Wednesday.
Germany, Europe’s biggest oil consumer, extended its lockdown to April 18 as Chancellor Angela Merkel urged citizens to stay at home for five days over the Easter holiday.
Worries over the pace of the recovery from the pandemic were also heightened after a U.S. health agency said the AstraZeneca Plc vaccine developed with Oxford University may have included outdated information in its data.
The US National Institute of Allergy and Infectious Diseases, who warned that the AstraZeneca vaccine could have included outdated information in its data, did not help demand concerns.
The company said the primary analysis results would be announced within 48 hours. However, several European countries have already banned the vaccine developed by the company over alleged blood clotting problems.
Late Tuesday, the American Petroleum Institute (API) announced that US crude oil inventories would rise by 2.9 million barrels per day relative to the previous market forecast of a 900,000-barrel rise.
If crude stocks increase in line with the API’s expectations, it signals that crude demand is falling in the US, the world’s largest oil consumer, to negatively affect oil prices.
Adding to the pressure, U.S. crude oil stocks jumped by 2.9 million barrels in the week to March 19, against analysts’ expectations in a Reuters’ poll for a decline of about 300,000 barrels, according to trading sources citing data from industry group the American Petroleum Institute.
But gasoline stocks fell by 3.7 million barrels, compared with expectations for a build of 1.2 million barrels.
Human rights sanctions on China imposed by the U.S., Europe and Britain, which prompted retaliatory sanctions from Beijing, also added to market concerns.
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Oil Climbs amidst Growing Concern in Europe, Sanctions
