Oil dipped by 3 per cent on Thursday as India’s coronavirus crisis worsened and operations to a key fuel pipeline in the United States resumed.
As a result, the Brent crude futures slid by $2.27 or 3.3 per cent to trade at $66.80 per barrel, while the West Texas Intermediate (WTI) crude futures went down by $2.75 or 3.5 per cent to sell at $63.64 per barrel.
India recorded more than 4,000 COVID-19 deaths for a second straight day on Thursday as infections stayed below 400,000, a sign that the country’s surging cases may have peaked. According to data, India had 362,727 new COVID-19 infections over the last 24 hours while deaths climbed by 4,120.
Oil demand in the country is expected to impact global demand due to the situation but there are expectations that it will improve its momentum again in the second half of 2021.
In the United States, Colonial Pipeline said late on Thursday it had restarted its entire pipeline system and had begun deliveries in all of its markets. This contributed to halting the rally that had lifted crude to an eight-week high in the previous session.
President Joe Biden reassured motorists that fuel supplies should start returning to normal this weekend, even as more filling stations ran out of gasoline nearly a week after a cyberattack on the nation’s top fuel pipeline.
The nearly-week long shutdown of the Colonial Pipeline, which carries 100 million gallons per day of fuel, caused gasoline shortages and emergency declarations, causing two refineries in the world’s largest producer to curb production, and spurred airlines to reshuffle operations.
Traders were also watching the situation in the Middle East after days of cross-border fighting between Israel and Palestine.
World leaders have called for a de-escalation of tensions in the volatile region as casualties continue to mount, spiking fears of a civil war in the long term conflict.
