Oil Falling as Demand Hit by Corona Restrictions in Europe

Oil prices fell 1% on Tuesday (March 23rd), as they were hit by fears that new restrictions imposed to combat the Coronavirus pandemic and the slow distribution of vaccines in Europe will slow down the recovery in demand, while producers cut production in a sign of abundant supplies.

US West Texas Intermediate crude futures for May delivery fell 80 cents, or 1.3%, to $ 60.76 a barrel. The April contract expired on Monday and reached $61.55, up 13 cents compared to Friday, after falling more than 6% last week.

Brent crude futures for May delivery fell 93 cents, or 1.4%, to $63.69 a barrel, erasing a nine-cent gain achieved in the previous session.

Last week, the Paris-based International Energy Agency cut its forecast for crude demand in 2021 by 2.5 million barrels per day, while the US Energy Information Administration expected global supplies of crude to exceed demand in the second half of the year.

Present markets for crude indicate that demand is much lower than in the futures market.

Africa’s largest oil producer Nigeria has lowered the official selling price for April loading shipments, indicating that suppliers are seeking to boost sales.