Oil prices fell more than 1% as fresh coronavirus lockdowns revived worries about demand for oil products, even as tug boats struggled to move a stranded container ship blocking crude oil carriers in the Suez Canal.
Brent crude futures slid 87 cents, or 1.4%, to $63.54 a barrel at 0405 GMT, after jumping 6% overnight, as reported by Reuters.
U.S. West Texas Intermediate (WTI) crude futures dropped by $1.02, or 1.7%, to $60.16 a barrel, after climbing 5.9% overnight.
Prices, which tumbled earlier in the week on worries about tighter pandemic curbs in Europe and vaccine delays stalling fuel demand growth, sharply reversed on Wednesday on news of the grounding in the Suez Canal, potentially blocking 10 tankers carrying 13 million barrels of oil.
Read also U.S. reiterates its position on Nord Stream 2 Dozens of ships were in the five waiting zones for passage through the nearly 200 km (120 mile) canal, with more approaching the area.
The market was also helped on Wednesday by data showing U.S. gasoline demand improved and refinery run rates were picking up.
However, analysts said such supportive factors were likely to be overshadowed by growing concerns about global demand.
India on Wednesday reported its highest one-day tally of new infections and deaths and said a new “double mutant” variant of the coronavirus had been found.
Given the persistent demand worries and falling prices, expectations are growing that the Organization of the Petroleum Exporting Countries and allies, together called OPEC+, will roll over their current supply curbs into May at a meeting scheduled for April 1, four OPEC+ sources told Reuters.
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Reporting by UNIAN