Oil prices Decline Amidst Growing Concerns on Prevailing COVID-19.

Oil prices declined for a fifth consecutive session on Thursday, falling around 1% after official data showed a further increase in U.S. crude and fuel inventories. At the same time, the prevailing pandemic reduced hopes for a recovery in oil demand.

Brent crude was down 74 cents, or 1.1%, at $67.26 a barrel by 0745 GMT after dropping 0.6% on Wednesday.

U.S. oil was also down 65 cents, or 1%, at $63.95 a barrel, having fallen 0.3% the previous session.

Both contracts are down around 3% over the last five days of declines.

oil prices 18-03-2021

On Wednesday, government data showed U.S. crude inventories have risen for four straight weeks after refineries in the south were forced to shut due to severe cold weather.

U.S. crude inventories increased by 2.4 million barrels last week. The U.S. Energy Information Administration (EIA) said on Wednesday, a day after the American Petroleum Institute (API) estimated a 1 million barrel-decline.

Stocks of gasoline and diesel increased against expectations among analysts for a decline.

“U.S. inventory numbers from the EIA were more bearish than the API numbers from the previous day suggested,” ING Economics said

As the stocks totalled more than 500 million barrels for the first time this year.

Impact of COVID-19 on Oil demand

The COVID-19 pandemic continues to negatively impact demand as more countries are experiencing the third wave, and others halting the use of AstraZeneca’s COVID-19 vaccine due to concerns about possible side effects.

Currently, Ireland, Netherlands, Denmark, Norway and Iceland have suspended the use of the vaccine, while Austria stopped using a batch of shots last week.

Germany has reported a rise in coronavirus cases, while Italy plans a national lockdown for Easter lockdown, and France will introduce tougher restrictions.

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