Oil prices look like they are on a quest to retest key Bollinger band support. Yesterday's unconvincing rally let the market bulls less confident that the lows were in and now could retest the 5866 support. Oil's failure to hold its rally was helped along with more questions surrounding the Astra Zeneca vaccine. Not in Europe this time but in the United States. The Wall Street Journal reported that “U.S. officials said they were told AstraZeneca may have released outdated information in its disclosure of trial results for its Covid-19 vaccine that could have provided an incomplete view of the efficacy data.” That news freaked out the market and pushed back the oil demand recovery expectations as traders tried to digest the data.

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Yet how could they do that when Dr. Faccui said the vaccine was safe? Well, Reuters reports that the Kremlin said on Tuesday it had deliberately decided it would not reveal the name of the Russian-made vaccine which President Vladimir Putin is due to take later on Tuesday. “We are deliberately not saying which shot the president will get, noting that all three Russian (-made) vaccines are absolutely reliable and effective,” Kremlin spokesman Dmitry Peskov told reporters.

Oil products are also fretting about the possibility of lagging jet fuel demand even though we are seeing the most amount of flying since the pandemic began. Argus Media points out that India's jet fuel exports in February rose to an 11-month high, against higher refinery output and a gloomy domestic jet fuel demand outlook. Bloomberg reports that the consumption of jet fuel in the U.S. has held above 1 million barrels a day since October, a marked improvement from the end of May 2020 when demand was around 600,000 barrels a day.

Overall, we believe that this is just a correction in a strong bull market. Sometimes at the end of March, the shoulder season overwhelms us a bit. Yet we expect a big drain on inventories in the coming weeks. We expect a big rebound in gasoline demand as more people get vaccinated. We look for gas demand to get a surge as the weather improves and there is a lot of sign that is happening. 

 The oil may also get moved by Fed Chair Jerome Powell. While what we heard from him yesterday was not a surprise. He did say the economy is coming back stronger than expected but we still have a long way to go. He also says that the economy depends on the virus.