Oil prices continue sinking this morning, extending the streak of losses to four days if current prices hold. Although COVID variants have been a talking point for months now, sentiment is now shifting markedly.

Before, variant concerns were met with a retort that vaccines were available and just needed time. Now vaccine rollouts have slowed, and recent reports show that vaccinated individuals, though generally safe from harm themselves, may be as contagious as unvaccinated individuals. The implications for public health are dire – already, some states have more COVID-related hospitalizations than they did during previous waves of the pandemic. Still, governments are hesitant to repeat last year’s shutdowns, so the question now is whether consumers and businesses will react to the higher health threat or continue unabated.

EIA released their weekly inventory data this morning, which included a surprise build in crude inventories. Despite a sharp draw in gasoline stocks revealing consumers continuing their activities, crude’s build shows that oil fundamentals may be transitioning back to a weaker market. With the worldwide focus on COVID slowdowns, traders fear that demand will erode at the same time that OPEC+ is increasing their output.