Oil price comes off the boil as the pandemic lingers

Brent crude oil had its worst week since October last week, tumbling by 7%, as continued virus restrictions in Europe weigh on demand.

Brent crude oil prices rocketed by 85% between the end of October and mid-March but have since retreated. Trading above $62 a barrel as of the middle of this week, crude is 10% off its recent highs.  

Brent crude had its worst week since October last week, tumbling by 7%, say Emily Gosden and Tom Howard in The Times. Renewed virus restrictions in Europe are weighing on the short-term demand outlook. The fall shows “how premature” bullish talk of a return to $100 a barrel has been, says Bjornar Tonhaugen of Rystad Energy. Oil prices are still being “artificially” propped up by “Opec’s reduced supply” deal. 

The International Energy Agency recently cut its global crude-oil demand forecast for this year by 2.5 million barrels per day, reports Reuters. There are growing signs of excess supply in physical crude markets, with Nigeria and Angola cutting prices and reporting unsold cargoes. 

That’s partly because they have a new competitor: traders say that Iranian oil exports to China are on the rise, in defiance of US sanctions, report Myles McCormick and David Sheppard in the Financial Times. The price pullback shows that the recent rally had become “overextended”. Still, many analysts think that global oil demand will still rebound sharply over the coming months. Goldman Sachs forecasts Brent crude prices of $80 a barrel come the summer.

Recommended

Where will house prices go in 2023?
House prices

Where will house prices go in 2023?

We explore what could happen to house prices in 2023 as the market continues to slow down.
24 Mar 2023
What is inflation and how will it affect you?
Inflation

What is inflation and how will it affect you?

There has been much talk of inflation recently. But what exactly is it and what does it mean for our money?
24 Mar 2023
3 success stories set for long-term growth
Investments

3 success stories set for long-term growth

A professional investor tells us where he’d put his money. This week: Felix Wintle, manager of the VT Tyndall North American Fund, selects three favou…
24 Mar 2023
Share tips of the week – 24 March
Investments

Share tips of the week – 24 March

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages
24 Mar 2023

Most Popular

5 top UK tech stocks
Investments

5 top UK tech stocks

The UK market has never been considered a fertile hunting ground for tech stars. But there are plenty of promising companies beyond the old economy, s…
23 Mar 2023
Where will house prices go in 2023?
House prices

Where will house prices go in 2023?

We explore what could happen to house prices in 2023 as the market continues to slow down.
24 Mar 2023
Will energy prices go down in 2023?
Personal finance

Will energy prices go down in 2023?

Ofgem’s price cap is now predicted to fall below £2,000, based on average typical use, from July, for the first time since 2022. We have all the detai…
21 Mar 2023