OPEC panel will meet on Thursday to further discuss ways to strengthen and review compliance to curb oil production and support prices
SEOUL: Oil prices retreated on Wednesday, weighed down by an increase in U.S. crude inventories and worries about a potential second wave of the coronavirus pandemic.
Brent crude futures were down 40 cents, or 1.0%, at $40.56 a barrel as of 0047 GMT, while U.S. West Texas Intermediate (WTI) crude futures fell 59 cents, or 1.5%, to $37.79 a barrel.
Both benchmarks rose over 3% in the previous session after the International Energy Agency (IEA) raised its 2020 oil demand forecast to 91.7 million barrels per day (bpd) and U.S. retail sales posted a record jump in May.
However, the rise in U.S. crude and fuel inventories, reported in post-settlement trade, stoked concerns over high supplies and put downward pressure on oil prices.
U.S. crude oil inventories rose by 3.9 million barrels in the week to June 12 to 543.2 million barrels, ahead of analysts’ expectations for a fall of 152,000 barrels, according to data from industry group the American Petroleum Institute.
Gasoline stocks rose by 4.3 million barrels and distillate fuel stockpiles, including diesel fuel and heating oil, rose by 919,000 barrels.
Official data from the U.S. Department of Energy’s Energy Information Administration is due later on Wednesday.
Worries over a possible second virus wave also weighed on prices, with the number of cases surpassing 8 million globally.
“It seems unavoidable there may be small spikes and isolated outbreaks throughout the world. It may take time for the oil market to desensitize, given the nascent recovery’s fragility,” said Stephen Innes, chief global market strategist at AxiCorp.
Meanwhile, an OPEC-led monitoring panel will meet on Thursday to further discuss ways to strengthen and review compliance with OPEC’s commitment to curb oil production and support prices.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies, collectively known as OPEC+, agreed to curtail supplies by 9.7 million barrels per day (bpd), about 10% of pre-pandemic demand until end-July.