Narratiive Tags - Khaleej Times Desktop
Markets
Logo
 

Oil prices slide as US crude stockpile growth heightens oversupply fears

Yuka Obayashi/Tokyo
Filed on June 24, 2020
US crude inventories rose by a much bigger than expected 1.7 million barrels last week. - Reuters

Brent crude was down 29 cents, or 0.7 per cent, at $42.34 a barrel by 0335 GMT, while US West Texas Intermediate (WTI) crude futures fell 35 cents, or 0.9 per cent, to $40.02 a barrel.

Oil futures dropped on Wednesday, extending losses from the previous day, after US crude stockpiles grew more than expected, adding to worries about oversupply.

Brent crude was down 29 cents, or 0.7 per cent, at $42.34 a barrel by 0335 GMT, while US West Texas Intermediate (WTI) crude futures fell 35 cents, or 0.9 per cent, to $40.02 a barrel.

US crude inventories rose by a much bigger than expected 1.7 million barrels last week, according to industry group the American Petroleum Institute (API), well ahead of analysts' expectations for a 300,000-barrel build.

However, US gasoline and distillate inventories fell, the data showed, feeding optimism that fuel consumption is picking up as some economies ease lockdowns imposed to contain the coronavirus pandemic.

US government data will be released on Wednesday.

"Some investors took profits after the recent rally as they saw higher US crude stockpiles," Chiyoki Chen, chief analyst at Sunward Trading said.

On Tuesday, both Brent and WTI contracts traded at their highest levels since prices collapsed in early March.

Global oil consumption has started to recover as economies emerge from lockdown, while the Organization of the Petroleum Exporting Countries (Opec) and allied producers - a grouping known as Opec+ - have slashed output and US shale producers have shut in wells.

Still, the market remains concerned about a rising number of coronavirus cases in the United States and elsewhere, said Kazuhiko Saito, chief analyst at Fujitomi Co.

New cases of COVID-19 rose 25per cent in the United States in the week ended June 21 and the death toll in Latin America passed 100,000 on Tuesday, according to a Reuters analysis and tally.

China, the world's top crude importer, is also expected to slow crude imports in the third quarter, after record purchases in recent months, as higher oil prices hurt demand and refiners worry about a second virus outbreak.

"We expect Brent to be traded between $35-45 a barrel for the next week as concerns over a second wave of the coronavirus pandemic will limit gains, while reduced supply from Opec+ will lend support," Sunward's Chen said. - Reuters


ERROR: Macro /ads/dfp-ad-article-new is missing!
MORE FROM Business
MORE FROM Khaleej Times
CurrentRequestUnmodified: /apps/pbcs.dll/article?avis=KT&date=20130814&category=ARTICLE&lopenr=308149939&Ref=AR&profile=1038 macro_action: article, macro_profile: , macro_adspot:
 
 
 
 
 
 
KT App Download
khaleejtimes app

All new KT app
is available
for download:

khaleejtimes - android khaleejtimes - ios khaleejtimes - HUAWEI AppGallery