Oil drops as rising stockpiles compound COVID-19 demand concerns

Shafaq News / Oil prices fell for a third straight day on Tuesday as rising stockpiles in the United States added to concerns about risks to demand as countries including Germany and France halt COVID-19 vaccinations, Reuters reported. 

Brent crude was down 49 cents, or 0.7%, at $68.39 by 0433 GMT, having dropped 0.5% on Monday. U.S. crude was down 47 cents, or 0.7%, at $64.92 a barrel, after declining 0.3% in the previous session.

Germany, France and Italy plan to suspend AstraZeneca PLC COVID-19 injections after reports of possible serious side effects, although the World Health Organization said there was no established link to the vaccine.

These moves are deepening concerns over a slow pace of vaccinations in the region, which may delay any economic recovery from the pandemic in one of the hardest-hit areas.

The pandemic eviscerated demand for oil but prices have recovered to levels before the global health crisis, only to be capped as vaccination rollouts have been slow in most countries.

In the United States, stockpiles are also rising because of last month's "big freeze" which halted refining operations that have taken time to fully return.

"Prices are pressured by expectations that last month's winter storm in Texas could keep boosting crude inventories," said Avtar Sandu, senior manager commodities at Phillip Futures in Singapore.

The American Petroleum Institute, an industry group, will report crude stock pile levels later on Tuesday, followed by official numbers from the Department of Energy on Wednesday, with analysts expecting another week of gain. [API/S]

Crude inventories increased by 12.8 million barrels in the week to March 5, against analysts' expectations for a rise of less than 1 million barrels.