Wednesday, Aug 05, 2020 | Last Update : 05:20 AM IST

133rd Day Of Lockdown

Maharashtra45795629935616142 Tamil Nadu2682852087844349 Andhra Pradesh176333956251604 Karnataka145830692722704 Delhi1391561252264033 Uttar Pradesh100310572711817 West Bengal80984568841785 Telangana6894649675563 Gujarat65704485612529 Bihar6203140760349 Assam4816233429115 Rajasthan4667932832732 Haryana3779631226448 Odisha3768124483258 Madhya Pradesh3508225414912 Kerala279561629988 Jammu and Kashmir2239614856417 Punjab1901512491462 Jharkhand140705199129 Chhatisgarh10109761369 Uttarakhand8008484795 Goa7075511460 Tripura5520367528 Puducherry4147253758 Manipur301818147 Himachal Pradesh2879171013 Nagaland24056594 Arunachal Pradesh179011053 Chandigarh120671520 Meghalaya9173305 Sikkim7832971 Mizoram5022820
  Business   Market  22 Jul 2020  Oil prices fall on US inventory build, increasing pandemic fears

Oil prices fall on US inventory build, increasing pandemic fears

REUTERS
Published : Jul 22, 2020, 8:44 am IST
Updated : Jul 22, 2020, 8:44 am IST

Industry group American Petroleum Institute reported U.S. crude inventories rose last week by 7.5 million barrels

 Oil prices fell on Wednesday as industry data showed a bigger- than-expected inventory build in the United States where coronavirus cases continue to climb. (AFP Photo)
  Oil prices fell on Wednesday as industry data showed a bigger- than-expected inventory build in the United States where coronavirus cases continue to climb. (AFP Photo)

SINGAPORE: Oil prices fell on Wednesday as industry data showed a bigger- than-expected inventory build in the United States where coronavirus cases continue to climb, potentially further denting demand in the world’s biggest oil consumer.

In his first briefing in months focused on the pandemic, U.S. President Donald Trump said that the outbreak would probably get worse before it gets better, one of his first recent acknowledgements of the spread of the problem.

 

Industry group American Petroleum Institute (API) reported U.S. crude inventories rose last week by 7.5 million barrels compared with expectations for a draw of 2.1 million.

Brent crude fell 32 cents, or 0.7%, to $44 a barrel by 0156 GMT, and U.S. West Texas Intermediate (WTI) crude dropped 33 cents, or 0.8%, to $41.59.

Oil prices climbed about $1 the previous day, reaching their highest since March 6.

“Crude’s rally hit a brick wall after the API report showed a sharp rise in stockpiles and on President Trump’s warning that the coronavirus pandemic in the U.S. is likely to worsen,” said Edward Moya, senior market analyst at OANDA in New York.  

 

“The crude demand outlook just got a double whammy with what could be the biggest rise in stockpiles since late May if confirmed by the EIA report tomorrow and on Trump’s downbeat virus briefing.”

The U.S. Energy Information Administration (EIA) will release official oil inventory data later on Wednesday.

Economic data from Japan, the world’s fourth-largest oil consumer, also weighed on prices. Factory activity contracted for a 15th straight month in July, indicating lower economic activity because of the pandemic is extending into the third quarter.

Oil prices rose on Tuesday on optimism for a COVID-19 vaccine and after European Union lenders agreed on a 750 billion-euro ($859 billion) fund to prop up coronavirus-hit economies.

 

Still, the effect of those funds on prompt oil prices will be mute as it may take months to start flowing and the impact may take years to show, Stephen Innes, chief global markets strategist at AxiCorp said in a note on Wednesday.

There are also signs that Iraq, the second-largest producer in the Organization of the Petroleum Exporting Countries (OPEC), is still not meeting its target under an OPEC-led supply cut deal.

Southern Iraqi exports in the first 20 days of July averaged 2.70 million bpd, according to data from Refinitiv Eikon and two industry sources, equal to official data for exports in all of June.

Tags: oil prices, inventory build, coronavirus cases, oil demand, oil consumer, crude oil, stockpiles