Published on: July 8th, 2020 11:10:51 am
Oil prices dipped on Wednesday after the industry-turns out to be a build in US inventories of crude, added to worries about oversupply, but hopes for a quick economic recovery in China is limited to the losses.
Brent crude futures fell 10 cents, or 0.2%, at $42.98 a barrel by 0417 GMT. US West Texas Intermediate (WTI) crude oil futures fell 12 cents, or 0.3%, to $40.50 a barrel, which is the narrow range of the past few weeks.
“The market is mixed as optimism about China’s economic recovery is being offset by the ongoing concerns that the high corona virus cases in the United States of america, and in other areas just a recovery in fuel demand,” said Satoru Yoshida, a commodity analyst at Rakuten Securities.
“We expect the POLICY to remain in the $38.50-$41.50 range for the next couple of weeks,” he added.
U.S. inventories of crude oil rose last week, against expectations for a draw, while gasoline and distillate inventories fell more than expected, data from industry group the American Petroleum Institute showed.
Adding to the pressure, the U.S. Energy Information Administration (EIA) said on Tuesday that U.S. crude oil production is expected to fall by 600,000 barrels per day (bpd) by 2020, a smaller proportion of the 670,000 bpd it forecast earlier.
However, it is the expected global oil demand to recover by the end of 2021.
“The M. E. R., the prediction of a lower decrease in OUR assets was in part offset by the outlook for robust demand recovery, which reduces the losses in the oil market,” Hiroyuki Kikukawa, general manager of research at Nissan’s Effects, he said.
“Many of the expectations that the Organization of the Petroleum Exporting Countries (OPEC) and its allies, it would taper oil output cuts in August and lower U.S. equities adds to the pressure,” he said.
The Abu Dhabi National Oil Co (ADNOC) boost-oil-exports-in-August, and the first signal that OPEC and its allies, known collectively as OPEC+, in preparation for their ease of record oil output cuts in the next month, three sources familiar with the development told Reuters.
Key government ministers at the OPEC + group is the result of the conduct of the interviews the following week.
In the meantime, in the US, corona virus outbreak is a grim milestone of over 3 million confirmed cases on Tuesday, as several member states have reported a record number of new infections.
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