Meanwhile, Total surfs pandemic tsunami to record profits: File Image/Pixabay
A temporary blip in the deployment of Covid vaccines in Europe caused crude traders on Tuesday to send oil prices downward for a third straight session, albeit minimally.
After Germany, France, and Italy said they would suspend use of the Oxford/AstraZeneca vaccine due to reports about possible serious side effects (although dismissed by the World Health Organization), Brent declined 59 cents to $68.29 per barrel; West Texas Intermediate fell 75 cents to $64.64 per barrel.
Bjornar Tonhaugen, head of oil markets at Rystad Energy, noted, "Before the recent setback, there was positivity that the campaigns under way were on the right track; for oil demand to fully recover, a successful and rapid inoculation of the global population needs to take place."
Bjornar Tonhaugen, Rystad Energy
For oil demand to fully recover, a successful....inoculation of the global population needs to take place
Also pressuring prices (and possibly for the next few sessions) was news that U.S. crude stocks jumped by nearly 14 million barrels in the week to March 5, far exceeding forecasts for a rise of less than 1 million barrels; the increase was attributed to refineries having yet to recover fully from the recent Texas deep freeze.
The fallout of the Covid lockdowns continued to be felt on Tuesday, with Saudi Arabia reporting that its economy contracted 3.9 percent in the fourth quarter of 2020 from the same period a year earlier, due to the historic slump in the oil sector.
But Tuesday also revealed surprising gains made by some energy players, case in point: Vitol Group, which people familiar with the matter told media reaped record profits of around $3 billion last year as it surfed the dramatic moves in energy markets.
This is compared to Total's previous record of $2.3 billion booked in both 2009 and 2019.
Also, despite news of vaccine suspension in Europe causing oil to decline, it should be noted that this was accompanied by reports that the European Commission on Tuesday expects to receive about 200 million doses of the Pfizer/BioNTech vaccine in the second quarter, to fulfill the EU's goal of vaccinating 70 percent of its adult population by the end of the summer.