Oil steadies, recovery stunded by European lockdowns, U.S. stockbuild

Oil prices steadiedr on Wednesday, following the previous day’s slump, but the recovery was stunted by fears of a slow recovery in demand due to new pandemic lockdowns in Europe and a build in U.S. crude stocks. Brent crude futures rose 8 cents, or 0.1%, to $60.87 a barrel by 0454 GMT, after tumbling 5.9% and hitting a low of $60.50 the previous day. West Texas Intermediate (WTI) crude futures climbed 8 cents, or 0.1%, to $57.84 a barrel, having lost 6.2% and touched a low of $57.32 on Tuesday.

Both benchmarks touched their lowest levels since early February on Tuesday and have now fallen nearly 15% from their recent highs earlier this month. The front-month spread for both Brent and WTI slipped into contango, where front-month contracts are lower than the later months, a sign that demand for prompt crude is declining. 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after a U.S. health agency said the AstraZeneca Plc vaccine developed with Oxford University may have included outdated information in its data.

Adding to 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.

Oil steadies, recovery stunded by European lockdowns, U.S. stockbuild, Reuters, Mar 24