Oil was down Tuesday morning in Asia, continuing its trend downwards over persistent worries about fuel demand recovery in the short term.
Brent oil futures were down 0.44% to $63.98 by 9:37 PM ET (1:37 AM GMT) and WTI futures fell 0.96% to $60.97. Both Brent and WTI futures remained above the $60 mark, however. The prompt time spread for Brent futures was 10 cents a barrel in backwardation on Monday, compared with 67 cents at the beginning of March.
An uneven recovery from COVID-19 globally is also putting pressure on the black liquid. Some European countries, including Germany, are extending or re-imposing restrictive measures as the number of cases climbs. Across the Atlantic, New York City mayor Bill de Blasio called for a pause on the city’s reopening citing insufficient information about COVID-19 variants. Demand has plateaued in South East Asia and is not expected to pick up to pre-COVID levels until the end of 2021 or possibly even later.
While demand worries have stalled oil’s recent rally, investors remained optimistic about the longer-term outlook thanks to continuing global COVID-19 vaccine rollouts and a $1.9 trillion boost from the U.S. in the form of its stimulus package signed into law earlier in the month.
On the supply side, the Organization of the Petroleum Exporting Countries and allies (OPEC+) will convene on Apr. 1 to determine production policy for May. The cartel has continued to put a floor under prices through its production cuts, which are scheduled to expire at the end of April.
Investors also await U.S crude oil supply data from the American Petroleum Institute, due later in the day.