MELBOURNE, March 23 (Reuters) - Oil prices fell 1% on
Tuesday on concerns that new pandemic curbs and slow vaccine
rollouts in Europe will slow a recovery in fuel demand and as
producers cut prices, indicating ample oil supply.
U.S. West Texas Intermediate (WTI) crude CLc1 futures for
May delivery fell 62 cents, or 1%, to $60.94 a barrel at 0149
GMT. The April contract expired on Monday at $61.55, up 13 cents
from Friday, after plunging more than 6% last week.
Brent crude LCOc1 futures for May dropped by 68 cents, or
1.1% to $63.94, erasing a 9 cent gain in the previous session.
"(The declines) are to do with vaccine rollout issues and
lockdowns in Europe," said Lachlan Shaw, National Australia
Bank's head of commodity research.
Germany, Europe's biggest oil consumer, is expected to
extend restrictions on shopping and travel into April to contain
a third wave of COVID-19 infections, which has led economists to
cut their growth forecasts. Extended lockdowns are being driven by the threat of a third
wave of infections, with a new variant of the virus on the
continent.
"This is heightening fears that the pessimistic forecasts
from both the International Energy Agency and the EIA (Energy
Information Administration) recently could eventuate," ANZ
Research said in a note.
The Paris-based IEA last week cut its forecast for crude
demand in 2021 by 2.5 million barrels per day, while the EIA
forecast global oil supply would surpass demand in the second
half of 2021. Physical crude markets are indicating that demand is lower
much more than the futures market.
Nigeria, Africa's biggest oil producer, on Monday cut its
official selling prices for April-loading cargoes, suggesting
that suppliers are trying to encourage sales. Angola, the
continent's second-biggest producer and a key supplier to China,
still has some April cargoes that remain unsold, indicating a
lack of interest from Chinese refiners.
"Physical prices have been weaker than futures have been
suggesting for several weeks now," Shaw said.
U.S. crude stockpile data from the American Petroleum
Institute will be released later on Tuesday. Analysts estimate
U.S. crude inventories fell by about 900,000 barrels in the week
to March 19 while refinery utilisation rose by 3.2 percentage
points, according to a Reuters poll. Inventory data from the EIA, considered more definitive,
will be released on Wednesday.