Oil prices slip from $70

LONDON:

Oil prices slipped on Monday after Brent hit $70 a barrel as data showed an accelerating economic recovery in China, which was offset by fears of inflation. Brent crude futures for May were at $68.27 a barrel, down $0.95 or 1.4% by 1515 GMT while US West Texas Intermediate crude for April was at $64.66 a barrel, also down $0.95 or 1.5%. A massive US stimulus package passed this month, raised prospects for global economic growth but also inflation. Still, analysts said a pact by top producers to rein in output and a rebound in demand due to vaccine rollouts will keep pushing prices upwards despite any temporary setbacks. “The inflation genie has found life rather uncomfortable in its bottle,” said Oanda senior market analyst Jeffrey Halley. “Futures spreads remain in backwardation, and dips in prices remain shallow and short-lived,” he added, referring to a market structure in which the current value is higher than prices for later contracts, encouraging oil sales. “Both (benchmarks) will find a procession of willing buyers if those regions are visited.”

Published in The Express Tribune, March 16^th, 2021.

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