WTI drops as European vaccine woes knock sentiment
- WTI has been on the back foot in recent trade as European nations have been halting rollouts of AstraZeneca’s vaccine.
- WTI is now back in the mid-$64.00s from Asia Pacific levels close to $66.50.
Front-month futures for the American grade of sweet light crude oil (called WTI) have been trading on the back foot these last few hours, with prices dropping from Asia Pacific session highs of close to $66.50 to current levels around the $64.50 mark, meaning WTI is now down close to $1.0 on the day or around 1.6%. Crude oil bears will now be targeting a move back to last week’s low in the mid-$63.00s, though such a move might offer an opportunity to longer-term dip buyers who may want to target a longer-term grind back towards recent highs at close to the $68.00 level.
Driving the day
The main story of the session thus far has been an unfolding panic in Europe regarding the safety of the AstraZeneca vaccine amid growing concerns that the vaccine is linked to an increased risk of developing life-threatening blood clots. The rollout of the AstraZeneca vaccine has been falling like dominoes across EU nations; over the weekend, Irish and Dutch health authorities halted the rollout of the vaccine, following in the footsteps of Spanish, Norwegian and Danish authorities who halted rollouts in the days before. Now Italy, France and Germany have stopped vaccinations – the German vaccine regulatory agency said that more thrombotic events (i.e. blood clots in veins) have been reported since Thursday following vaccination by the AstraZeneca jab.
UK and global health authorities, as well as AstraZeneca themselves, maintain the safety of the vaccine, but nonetheless, Monday’s developments do seem to have delivered a modest blow to confidence and hence crude oil markets are suffering, in tandem with some minor downside being seen in global equity markets (major US and European equity indices are nursing losses across the board).
In terms of other relevant news flow for crude oil markets on Monday, there has not been much of note. Key events later in the week, such as Tuesday’s US Retail Sales data release and Wednesday’s FOMC meeting will be the major demand-side events to watch, while weekly crude oil inventory numbers will, as ever, also be key to watch.