Oil prices slide as coronavirus lockdown concerns outweigh Suez Canal disruptions

By Sonali Paul
MELBOURNE, March 25 (Reuters) - Oil prices skidded around 2%
as fuel demand concerns re-emerged alongside fresh coronavirus
pandemic lockdowns, trimming overnight gains spurred by the
grounding of a giant container ship blocking crude shipments
through the Suez Canal.
Brent crude LCOc1 futures slid $1.14, or 1.8%, to $63.27 a
barrel at 0139 GMT, after jumping 6% overnight.
U.S. West Texas Intermediate (WTI) crude CLc1 futures
dropped by $1.27, or 2.1%, to $59.91 a barrel, after climbing
5.9% overnight.
Prices had tumbled earlier in the week on worries about
tighter pandemic curbs in Europe and vaccine delays stalling
growth in demand for fuel, but sharply reversed on Wednesday
with the grounded ship in the Suez Canal potentially blocking 10
tankers carrying 13 million barrels of oil. The market was also helped on Wednesday by data showing U.S.
gasoline demand improved and refinery run rates were picking up.
EIA/S
However, those factors supporting the market were
short-lived, even as tugs struggled to free the stranded Suez
Canal ship. [nL1N2LM051
"As much as those (Suez blockage and U.S. demand) factors
were there, it doesn't really erase the demand concerns
questions that were asked earlier this week," said Commonwealth
Bank commodities analyst Vivek Dhar.
"And while the focus was on Europe, we also have rising
COVID-19 cases in places like India and Brazil, developing
economies which are really critical to the story for sustainable
oil demand growth."
India on Wednesday reported its highest one-day tally of new
infections and deaths and said a new "double mutant" variant of
the coronavirus had been found. Given the persistent demand worries and falling prices,
expectations are growing that the Organization of the Petroleum
Exporting Countries and allies, together called OPEC+, will roll
over their current supply curbs into May at a meeting scheduled
for April 1, four OPEC+ sources told Reuters.