Oil slips more than 2% as India demand worries weigh
Oil prices slipped on Friday, taking a breather after touching their highest in six weeks as concerns of wider lockdowns in India and Brazil to curb the Covid-19 pandemic offset a bullish outlook on summer fuel demand and economic recovery.
Brent crude fell 1.91%, or $1.31, to settle at $67.25 per barrel, the last day’s trading for the front-month June contract. U.S. West Texas Intermediate crude for June settled 2.2%, or $1.43, lower at $63.58 per barrel.
Such a level is likely to be reached only in the third quarter this year, when demand improves materially and destocking ends, they said.
Brent is on track to gain roughly 8% in April while WTI could see gains of nearly 10%.
The increases will be the fifth monthly gains in six months as global demand has almost returned to pre-pandemic levels on the back of fiscal stimulus and the easing of virus lockdowns in some countries, while production cuts from OPEC and their allies including Russia eased crude oil oversupply.
Wider adoption of Covid-19 vaccinations is also restoring confidence in travel, lifting oil demand.
Several U.S. cities are emerging from lockdown stoking confidence of stronger demand in gasoline ahead of the key U.S. summer driving season, ANZ analysts said, while UK road fuel sales are nearing last summer’s levels.
The upcoming Labour Day holiday in China would also boost fuel demand at the world’s second largest oil consumer.
Reference: CNBC
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