Daily Market Recap - Oil's surge halted by doubts about the global recovery

WTI and North Sea Brent crude oil fell by more than 8% on Thursday evening, with the former dropping back below $60. This collapse in prices wiped out more than two weeks of gains. The oil market had not experienced such a stall for 6 months.

Investors have been worried for some days about the slowdown in vaccination campaigns in some countries. This slowdown calls into question the short-term recovery and as a consequence, the rebound in global oil demand.

If the fall has accelerated considerably on Thursday, it is actually five consecutive sessions that oil loses ground, a worrying situation for oil bulls. Crude has not experienced such a long slide for a year.

It must be said that the rebound since last year's crisis has been spectacular. Some observers are wondering whether the increase (over 20% since the beginning of the year) was not a little too rapid. Doubts about the pace of vaccination have been compounded by the rise in US stocks and the report of the International Energy Agency (IEA).

AstraZeneca's Covid-19 vaccine has been suspended by several European Union (EU) countries after reports of possible side effects, such as clotting disorders and clotting. France, Germany, Spain, and Italy, however, announced Thursday that AstraZeneca vaccinations would resume, with the European Medicines Agency (EMA) deeming the vaccine “safe and effective”.

The weekly report from the U.S. Energy Information Agency showed that crude oil inventories were, at 500.8 million barrels) at their highest since early December. But above all, in its monthly report, the IEA estimated that after the health crisis, global oil demand could take two years to return to pre-crisis levels.

(Chart Source: Tradingview 18.03.2021)

In the short term, some observers point to a drop in demand, particularly from China, but also from US Gulf Coast refineries which are still struggling to recover from the February cold snap. Despite the prospects for a longer-term recovery, short-term demand remains fragile and the global recovery uneven.

Disclaimer: This material has been created for information purposes only. All views expressed in this document are my own and do not necessarily represent the opinions of any entity.