Oil prices pulled back on Thursday from their previous gain due to concerns about global supply and demand. In early trading, Brent and US WTI crude futures increased after receiving positive sentiment from increasing Saudi Arabia’s official crude selling price and an unexpected rise in China’s April exports. Oil prices have rallied this week, supported by a modest gain in fuel demand as some countries relaxed coronavirus related restrictions.
However, significant headwinds regarding economic slowdown, demand, and storage persist. US crude inventories in Cushing, Oklahoma increased by about 407,000 barrels during the week ended May 5, an industry survey showed. Meanwhile, global oil consumption is expected to fall by 10.9% from around 99.5 million bpd last year to 88.7 million bps this year. Next year, demand is expected to edge up to 88.8 million bpd.
Adding the negative sentiment, US unemployment claims extended increase with an additional 3.2 million of claims during the week through May 2. This brings the total claims for unemployment benefits to 33 million since March 21.
The international benchmark Brent LCOc1 futures lost 26 cents (0.9%) to $29.46/barrel. Meanwhile, US WTI crude CLc1 fell 44 cents (1.8%) to $23.55/barrel. In earlier sessions, Brent and WTI gained more than 5% and 10%, respectively. This week, Brent and WTI have been up about 11% and 18%, respectively.
