Meanwhile, OPEC reports high compliance rates for its cutbacks: File Image/Pixabay
Covid concerns continued to affect worry-prone crude traders on Tuesday, as fears of possible lockdowns in India caused Brent to fall 58 cents to $66.47 per barrel by 1:23 EDT (1723 GMT) and West Texas Intermediate to decline by 83 cents to $62.55.
Bob Yawger, director of energy futures at Mizuho, said, "Given India's position as a major crude oil importer in the world, new restrictions would be very bad for the energy complex."
Narendra Modi, India's prime minister on Tuesday said citizens should take precautions to halt the rising infection rate of Covid, but he stopped short of imposing restrictions.
Dan Yergin, vice chairman, IHS Markit
It's reasonable to think that oil would be in that $60 to $75 range
Oil was also negatively impacted by news of a second wave of infections in the Philippines.
Demand appeared not to be a problem in China, whose crude oil imports from top supplier Saudi Arabia rose 8.8 percent in March from a year earlier; imports from the United Arab Emirates also rose again, up 86 percent.
Meanwhile, two sources from the Organization of the Petroleum Exporting Countries (OPEC), the body widely credited for keeping the oil market largely on track during the pandemic, reported on Tuesday that it achieved a compliance level with its agreed production cuts of 113 percent in March, unchanged from levels in February.
The current angst over rising infection rates has been regarded by some analysts as a temporary blip on the road towards total recovery, and on Tuesday Dan Yergin, vice chairman at IHS Markit, noted that “The U.S. is headed into a hyper economic recovery right now, China has a very strong recovery and that will push up demand.
“The biggest uncertainty now is actually hanging over Europe and when Europe will be able to get out of its lockdown and start growing again.”
Yergin added, “If we really do have the rest of the world recover, I think it’s reasonable to think that oil would be in that $60 to $75 range.”
Jay Hatfield, CEO at InfraCap, remarked, “Once we get into May, we should start to see the next leg down in the virus, and that will be a tailwind for oil.”
A snapshot of the tailwind traders can expect was provided by the U.K., where driving is soaring as more than 60 percent of its population over 18 has received a first vaccine dose.