Oil dropped sharply in London on concerns about the demand outlook and as the futures curve flipped into a structure indicating near-term weakness.
Brent futures slumped as much as 5%. There are concerns over the prospects for consumption with Covid-19 cases surging in India and threatening the economy’s recovery from recession. Germany will extend its curbs and impose an Easter lockdown, while in the U.S., New York City’s mayor urged a pause on reopening.
There were more technical factors pressuring prices too. The nearest Brent futures contract traded at a discount to the next month for the first time since January -- a pattern known as contango that points to oversupply -- after a precipitous selloff in recent days. At the same time West Texas Intermediate fell below its 50-day moving average for the first time since November.
- Brent for May settlement fell $2.40 to $62.22 a barrel as of 8:45 a.m. in New York
- West Texas Intermediate for the same month lost $2.16 to $59.40
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