Oil was down Monday morning in Asia, with U.S. Federal Reserve Chair Jerome Powell saying the U.S. economy was poised for stronger growth while also cautioning that COVID-19 remains a threat.
Brent oil futures inched down 0.06% to $62.91 by 13:14 AM ET (5:14 AM GMT), and the prompt timespread for Brent futures was 44 cents a barrel in backwardation compared with 32 cents a week earlier. WTI futures inched down 0.10% to $59.26.
The economy is at an “inflection point” with stronger growth and hiring ahead thanks to the COVID-19 vaccine rollout and powerful policy support, Powell said in an interview. However, he also added that the principal risk was the ever-spreading COVID-19 virus, with India hit with a second wave of cases and Europe still struggling through its third wave.
The virus outbreaks led some countries to renew restrictive measures and dented the black liquid’s strong start to 2021 as fuel demand recovery fears also resurfaced.
On the supply side, the Organization of the Petroleum Exporting Countries and allies (OPEC+) is set to add more barrels from May onwards. Saudi Arabia’s energy minister, Prince Abdulaziz bin Salman, has also said that the increase is the right move for the cartel.
As discussions continue to resuscitate a 2015 nuclear accord, Iran remains a wildcard for the market. The talks between the OPEC producer and other powers will continue after the first round concluded during the previous week.