U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are trading lower shortly before the regular session opening on Tuesday. A combination of catalysts is driving prices lower including a wave of coronavirus infections, a fresh lockdown in Germany and U.S. and European sanctions over China.
COVID Cases Rising in 21 States as Health Officials Warn Against Reopening Too Quickly
Even as the pace of vaccinations accelerates in the U.S., COVID-19 cases are increasing in 21 states and highly infectious variants are spreading as governors relax restrictions on businesses like restaurants, bars and gyms, according to CNBC.
Public health officials warn that while roughly 2.5 million people nationwide are receiving shots every day, infection levels have plateaued this month and some states have failed to reduce the number of daily cases.
The 7-day moving average of new infections plateaued at 54,666 as of Friday after declining for weeks, according to a CNBC analysis of data from Johns Hopkins University.
Germany Extends Virus Lockdown Until Mid-April as Cases Rise
Germany has extended its lockdown measures by another month and imposed several new restrictions, including largely shutting down public life over Easter, in an effort to drive down the rate of coronavirus infections.
Speaking early Tuesday after a lengthy video call with the country’s 16 state governors, Chancellor Angela Merkel announced that restrictions previously set to run through March 28 will now remain in place until April 18.
West Sanctions China over Xinjiang Abuses, Beijing Hits Back at EU
The United States, the European Union, Britain and Canada imposed sanctions on Chinese officials on Monday for human rights abuses in Xinjiang, the first such coordinated Western action against Beijing under new U.S. President Joe Biden.
Beijing hit back immediately with punitive measures against the EU that appeared broader, including European lawmakers, diplomats, institutes and families, and banning their businesses from trading with China.
The above dealt primarily with the demand side, but later today, investors will have a chance to react to the supply side.
Firstly, 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.
Secondly, U.S. crude stockpile data from the American Petroleum Institute will be released later on Tuesday at 20:30 GMT. Analysts estimate U.S. crude inventories fell by about 900,000 barrels in the week to March 19 while refinery utilization rose by 3.2 percentage points, according to a Reuters poll.
For a look at all of today’s economic events, check out our economic calendar.