Oil falls over 3% as dollar rises and vaccine rollout stalls

Oil falls over 3% as dollar rises and vaccine rollout stalls

News: Oil falls over 3% as dollar rises and vaccine rollout stalls.

LONDON (Reuters) – Oil prices fell for the fifth consecutive year on Thursday due to a stronger dollar, further spikes in U.S. crude oil and fuel supplies, and the weight of the ubiquitous COVID-19 pandemic.

Brent crude fell $ 2.33, or 3.43%, to $ 65.67 a barrel at 1426 GMT. US oil fell $ 2.27, or 3.51%, to $ 65.67 after losing 0.3% in the previous session. Both contracts are down 6% in the past five days.

“Short-term developments – stuttering vaccine launches and rising US oil inventories – are driving sentiment, but the longer-term oil outlook remains encouraging,” said Tamas Varga, analyst at PVM Oil Associates.

“Yesterday’s Federal Reserve meeting gave stocks a boost … US economic growth has been revised upwards while unemployment is expected to fall.”

A sharp rise in the value of the dollar after the Fed meeting also drove the oil sell-off.

Government data on Wednesday showed US crude stocks rose for four straight weeks after refineries in the south shut down in cold weather. An industry report that estimated a decline had raised hopes of halting profits.

US crude oil inventories rose 2.4 million barrels last week, the US Energy Information Administration (EIA) said Wednesday, a day after the American Petroleum Institute (API) forecast a 1 million barrels decline.

Varga added the market would wait for US production data next week for more clues about the health of the world’s largest economy.

“Lower demand for crude oil from Asian buyers as a result of the upcoming refinery maintenance and probably higher prices are also not helping crude oil at the moment,” said UBS commodities analyst Giovanni Staunovo.

A slowdown in some vaccination programs and the prospect of further restrictions on the coronavirus fight have tempered expectations for a recovery in fuel economy.

The UK said Thursday that global shipments would mean vaccine rollouts to be slower than hoped in the coming weeks, but expects shipments to spike from May.

A number of European countries have stopped using the AstraZeneca shot due to concerns about possible side effects, despite the World Health Organization saying Europe should continue to use the vaccine.

Reporting by Julia Payne and Aaron Sheldrick. Adaptation by David Goodman and Mark Potter

Original Source © Reuters

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