Oil prices fell for a third day on Tuesday, as a recovery in demand was threatened by rising U.S. inventories and moves by Germany, France and some other European states to suspend the use of a major coronavirus vaccine.
Brent was down $1.11 cents, or 1.6%, at $67.77 a barrel by 1325 GMT. U.S. crude fell $1.17, or 1.7%, at $64.22.
Germany, France and Italy said they would suspend the use of the Oxford/AstraZeneca vaccine after reports about possible serious side effects, although the World Health Organization said there was no established link to the vaccine.
The moves deepen concerns about the slow pace of vaccinations in the European Union, threatening an economic recovery and fuel demand.
The pandemic eviscerated demand for oil. Prices have recovered to levels seen before the global health crisis, but gains have been capped as vaccine rollouts have proceeded slowly in many countries.
In the United States, crude inventories are also rising as refineries have taken time to recover fully from a "big freeze" that halted their operations in Texas and elsewhere.
"Short-term direction will be set by the weekly U.S. inventory reports," PVM analysts said in a note, adding that the dollar's strength against other currencies also weighed on the oil price.
Analysts expect another week of inventory gains when the American Petroleum Institute, an industry group, reports on crude stockpiles on Tuesday, followed by official numbers from the Department of Energy on Wednesday.
Inventories rose by 12.8 million barrels in the week to March 5, against forecasts for a rise of less than 1 million barrels.
Dear Reader,
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.
Digital Editor
RECOMMENDED FOR YOU