At press time, the British-based contract Brent crude futures lost over 1% to trade at $63 a barrel after jumping substantially yesterday.
Sequel to the Suez Canal blockage, oil prices had lately been under immense selling pressures as the black viscous hydrocarbon lost about 5% in value, breaching below $65 a barrel on fears about tighter COVID-19 curbs in key emerged markets and of late the suspension of vaccine usage in Western Europe.
Also recent revelation from a U.S health regulator points that AstraZeneca vaccine could have included outdated information in its data, stunned oil traders in staying long relatively.
Such macros altered the bulls’ run momentarily and sharply reversed yesterday’s gain on news of the blockage in the Suez Canal, potentially obstructing oil tankers carrying about 13 million barrels of oil.
Consequently, recent price actions reveal oil traders are reacting more to demand risks rather than supply dynamics even as oil vessels carrying Russian, Saudi, Omani and US crude wait on, meaning it could be just a matter of few weeks for Brent crude bears to test the $60 support levels.
The soaring value in the U.S dollar in recent times further compounds the precarious situation oil bulls are currently in, as recent data from the U.S dollar index reveal investors presently prefer to hold the safe-haven currency, rather than holding riskier assets like commodities.
In line with broader market sentiments, oil bulls are under siege as Covid-19 concerns batter hard on oil prices, OPEC+ April 1 meeting might see a rollover of their current supply curbs into May.