Oil prices fell to their lowest level two weeks after official data showed an unexpected surge in US crude oil inventories. In addition, rising COVID-19 cases in Europe, Russia, and some outbreaks of infections in China shattered hopes for an economic recovery.
Brent crude fell $ 1.58, or 1.9%, to $ 83.00 a barrel by 05:02 am GMT, hitting a two-week low of $ 82.32 earlier and falling 2.1% in the previous session …
American oil fell $ 1.39, or 1.7%, to $ 81.27 a barrel, a weekly low, after falling 2.4% on Wednesday.
Outbreaks of coronavirus infections in China, record death rates, and the threat of isolation in Russia, as well as an increase in morbidity in Western Europe, have slowed down the multi-week rise in oil prices.
“A spike in new COVID-19 cases threatens to derail the recovery in oil demand,” said ANZ Research commodity strategists Daniel Hines and Sonia Kumari in a new report Thursday.
In the United States, the economy probably grew at its slowest pace in more than twelve months in the June-September quarter amid a surge in COVID-19 infections, strained global supply chains, and a global shortage of goods such as cars.
Crude oil inventories rose 4.3 million barrels last week, the US Department of Energy said, more than double analysts’ forecast for a gain of 1.9 million barrels.
“The significant” increase in inventories came “amid a large jump in net crude imports and still sluggish refining at refineries,” Citi Research commodities said in a note.
However, gasoline inventories fell 2 million barrels to their lowest level in nearly four years, even as US consumers struggle with rising prices to fill their tanks.
At the WTI supply center in Cushing, Oklahoma, crude stocks are the most depleted in the past three years, and the prices of longer-term futures contracts indicate that supply will remain low for several months.
Oil continues to rise in its second month and hit a seven-year high above $ 85 a barrel on Monday. Prices rallied on rising demand as the pandemic weakened and the wider gas-related energy crisis. At the same time, the Organization of the Petroleum Exporting Countries and its allies are restoring supplies at a modest pace. The cartel will meet next week. “The Iranian announcement signals that they are ready to negotiate, and as the volume of Iranian crude oil is significant for the market, we see a sell-off,” Will Sungchil Yoon, senior commodities analyst at VI Investment Corp., said by phone. “The rise in US crude oil inventories also shows that the market should not be too worried about supply, so it will be important to know the position of OPEC +.”