OIL-Crude prices fall due to COVID-19 crisis in India and resumption of US oil pipeline activity

By Shadia Nasralla

LONDON (Reuters) – Crude fell more than 2% on Thursday as the pandemic worsened in India and after Colonial Pipeline resumed operations, slowing the rise that took the barrel to eight-week highs after forecasts by the IEA and from OPEC of a rebound in global demand later in the year.

* Brent crude was down $ 1.7, or 2.44%, at $ 67.63 a barrel at 1115 GMT, after gaining 1% on Wednesday. WTI oil futures were down $ 1.69, or 2.59%, at $ 64.35 a barrel, after rising 1.2% the day before.

* If the losses continue, both contracts would mark their biggest daily percentage drops since the beginning of April.

* In a threatening signal for oil demand, a variant of the coronavirus is besieging rural areas of India, the world’s third-largest oil importer.

* Medical experts have not been able to calculate when COVID-19 infections will reach a plateau and other countries are alarmed by the transmissibility of the variant now spreading around the world.

* “Concerns are growing that an uncontrolled spread of the coronavirus in India and Southeast Asia will further deteriorate oil demand,” PMV analysts said. “But the impact is expected to be relatively short and that in the second half of the year we will experience a reactivation of demand growth.”

* Meanwhile, fuel shortages worsened on Wednesday in the southeastern United States, six days after the shutdown due to a ransomware attack on Colonial Pipeline, the nation’s largest fuel pipeline network.

* The pipeline resumed operations on Wednesday and Colonial, which pumps more than 2.5 million barrels a day of fuel, said it expected to have a large part of the network active by the end of the week.

(Reporting by Shadia Nasralla; additional reporting by Aaron Sheldrick. Edited in Spanish by Janisse Huambachano / Marion Giraldo)

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