On Wednesday, oil prices went down as the jump in US crude stockpiles and the fears over the resurgence of coronavirus haunted the market.
At 00.47 GMT, Brent crude oil futures slipped by 1% or 40 cents to USD40.56/barrel while US WTI shrank by 1.5% or 59 cents to USD37.79/barrel.
In the previous session, both benchmarks gained more than 3% following the International Energy Agency (IEA)’s new forecast of 2020 oil demand, with an increase to 91.7 million bpd. Other than that, US retail sales recorded a record gain in May.
However, oil prices were pressured by the jump in US crude and fuel stockpiles reported in post-settlement trade yesterday.
Data from the American Petroleum Institute showed that in the week ended June 12, the US crude oil stockpiles jumped by 3.9 million barrels to 543.2 million barrels. Gasoline inventories soared by 4.3 million barrels and distillate stockpiles climbed by 919,000 barrels.
Other than that, the downward pressure came from the rising new cases of coronavirus, which now totaled at more than 8 million globally.
Economist Stephen Innes of AxiCorp opined that the oil market might take time to desensitize to the number of new infections around the world. At the moment, the recovery is still fragile, he opined.
Separately, on Thursday, an OPEC-led monitoring panel will meet to further negotiate on ways to strengthen and review compliance with OPEC’s commitment to curb oil production and support prices.
