Oil futures plunge as Colonial restarts, India concerns resurface

London (Quantum Commodity Intelligence) – Oil futures fell sharply Thursday, following the restart of the Colonial east coast pipeline, while fears reemerged over a slow recovery in India as the country struggles with its COVID-19 pandemic.

Brent futures for front-month July were trading at $66.83/barrel (1620 GMT), compared to Tuesday's settle of $69.32/b, a drop of 3.59%. At one point

At the same time June WTI was trading $63.94/b, down 3.24% from Wednesday's settle of $66.08/b.

The Colonial Pipeline, which delivers almost half of all road and aviation transport fuel demand to the US East Coast, is expected to return of full capacity over the weekend, alleviating fuel shortages across parts of the country.

The pipeline transports 2.5 million barrels each day, taking refined gasoline, diesel fuel and jet fuel from the Gulf Coast up to New York Harbor and New York's major airports.

Meanwhile, fears once again resurfaced that Indian demand could subdued for a third month going into June. According to latest government figures, Indian demand for transport fuels fell 9% during April, but that figure is expected to be sharply down for May.

On Wednesday, the IEA said India's Covid-19 crisis will wipe 630,000 b/d of oil demand in the country during the second quarter.