TOKYO (JAPAN) – Rising COVID-19 case in some parts of the world has resulted in a plunge in oil prices. The prices slipped even as the Federal Reserve signaled the US economy may soon rebound as vaccinations accelerate.
Brent was up 28 cents, or 0.4%, at $62.67 a barrel by 0635 GMT, having risen to as high as $63.30 earlier. US crude was down 23 cents, or 04%, to $59.09 a barrel, after rising as much as 46 cents earlier.
“At the moment, the market lacks direction,” the Schork Report said in a note, adding, “We are waiting for a breakout of the current range.”
That is likely to continue to keep a lid on any revival of global travel and keep prices rangebound as the summer approaches, analysts and traders said.
The US economy is at an “inflection point” amid expectations that growth and hiring will accelerate in the months ahead, but faces the risk of reopening too quickly and sparking a resurgence in coronavirus cases, Federal Reserve Chair Jerome Powell said in an interview broadcast on Sunday.
“There really are risks out there. And the principal one just is that we will reopen too quickly, people will too quickly return to their old practices, and we’ll see another spike in cases,” Powell said in a CBS interview, recorded on Wednesday.
On the production side, no new oil drilling rigs were started in the United States in the most recent week, according to a widely watched report published by Baker Hughes.