UPDATE 5-Oil tumbles 4% on concerns over Europe curbs, rollouts

(Updates throughout, adds comment, changes dateline from
LONDON)
By Jessica Resnick-Ault
NEW YORK, March 23 (Reuters) - Oil prices fell more than 4%
on Tuesday, hit by concerns over new pandemic curbs and slow
vaccine rollouts in Europe as well as a stronger dollar.
Brent crude futures LCOc1 were down $2.56, or 4%, to
$62.08 a barrel by 12:16 p.m. ET (1616 GMT), having hit a low of
$61.41. West Texas Intermediate crude (WTI) CLc1 fell $2.65,
or 4.3%, to $58.91, after falling to as low as $58.47.
Both benchmarks traded near lows not seen since Feb. 12.
The front-month Brent spread LCOc1-LCOc2 flipped into a
small contango for the first time since January. Contango is
where the front-month contracts are cheaper than future months,
and could encourage traders to put oil into storage.
"The road to oil demand recovery appears to be full of
obstacles as the world continues to fight the COVID-19
pandemic," Bjornar Tonhaugen, head of oil markets at Rystad
Energy. "Oil prices are declining again on Tuesday, proving that
last week's correction was not deep enough and that the market
had been trading lately with an excessively bullish sentiment,
overlooking the pandemic's risk," he said.
Extended lockdowns in Europe are being driven by the threat
of a third wave, with a new variant of the coronavirus on the
continent.
Germany, Europe's biggest oil consumer, is extending its
lockdown until April 18. Nearly a third of France entered a month-long lockdown on
Saturday following a jump in cases in Paris and parts of
northern France. A stronger U.S. dollar =USD also weighed on prices. As oil
in priced in U.S. dollars, a stronger greenback makes oil more
expensive for holders of other currencies.
Physical crude markets are indicating that demand is lower,
much more so than the futures market.
"Physical prices have been weaker than futures have been
suggesting for several weeks now," said Lachlan Shaw, head of
commodity research and National Australia Bank.