Following the massive sell-off on Thursday, oil prices fell again early Friday as bearish sentiment continued its grip on the market.
At 9:47 a.m. EDT Friday, WTI crude oil prices fell 0.83 percent to $ 59.53, and Brent crude oil prices fell 1.09 percent to $ 62.63, as oil demand concerns rose. prevailed in the short term.
On Thursday, oil prices fell 9 percent at one point before Brent dropped 7 percent that day.
“From a fundamental perspective, there was little behind yesterday’s move. The market is getting more and more nervous around some European countries again imposing Covid-19-related restrictions, driving the demand outlook, ”ING strategists Warren Patterson and Wenyu Yao said on Friday. The fall in prices was the spike in US Treasury yields and the rising US dollar.
The higher dollar weighs on the oil market throughout the week as a stronger dollar makes crude oil more expensive for holders of other currencies.
Some profit-taking is also pushing oil prices down, as market participants are focused on the short-term negative signals rather than the more optimistic expectations for a robust recovery in oil demand later this year. Related: Oil Sees Biggest One-Day Loss Since April 2020
The spot oil market for physical barrels in the main demand region, Asia, is also showing signs of weakness as it started to weaken in the middle of this week, with subdued purchases from Chinese buyers, traders tell Bloomberg.
The recent disruptions to the EU’s vaccination programs have also worried traders and speculators that setbacks could delay the reopening of the largest economies, including travel abroad. Most EU countries that had stopped vaccinations with the AstraZeneca vaccine due to concerns about blood clots resumed the injections after the European Medicines Agency (EMA) on Thursday, again following a new evaluation, said the vaccine is safe.
Still, lockdowns in Europe are not over yet. France ordered a lockdown in Paris and 16 other areas for four weeks starting Friday, relocking 21 million people, or about a third of the population, over fears of a third wave of COVID-19 cases.
By Tsvetana Paraskova for Oilprice.com
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