Oil slumped as a string of renewed lockdown measures in Europe clouded the prospects for a speedy recovery in consumption.
Prices in New York and London fell as much as 5%, and the oil futures curve showed signs of near-term weakness. Europe’s demand recovery is set to take another hit with Germany, France and Italy all having widened lockdown measures this month. Meanwhile, coronavirus cases are surging in India and threatening the economy’s recovery from recession.
“With much of Europe being shuttered, the implications ultimately for next quarter are that the demand increases may not be as robust,” said Bart Melek, head of commodity strategy at TD Securities. “We’re continuing to see broad long liquidations in the oil space here, and it stands to reason that long positions could restart the trend lower.”
- West Texas Intermediate for May delivery fell $2.65 to $58.91 a barrel as of 12:05 p.m. in New York
- Brent for the same month lost $2.60 to $62.02 a barrel, plunging to its lowest since Feb. 12 on an intraday basis
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