Oil Prices Fall As Rising US Stocks Indicate Bumpy Demand Recovery By Reuters

By Shu Zhang and Sonali Paul

SINGAPORE / MELBOURNE (Reuters) – Oil prices fell on Thursday after data showed U.S. crude stocks unexpectedly spiked last week, fueling concerns about a slow recovery in fuel demand as cases of coronavirus continue to rise in many countries.

U.S. West Texas Intermediate (WTI) crude futures () fell 24 cents, or 0.63%, to $ 37.81 a barrel at 0417 GMT, after rising 3.5% on Monday. Wednesday.

Brent crude () futures fell 17 cents, or 0.42%, to $ 40.62 a barrel, after rising 2.5% on Wednesday.

The oil market is under pressure on the prospect of both subdued demand and rising supply, ANZ analysts said in a note. The U.S. Energy Information Administration (EIA) will release official weekly inventory data later on Thursday, one day later than normal after the U.S. Labor Day holiday.

“The (refinery) maintenance season and a cautious approach by refineries should keep demand for crude oil soft,” the bank said, referring to regular scheduled shutdowns at oil processing complexes.

ANZ also said that China’s imports are likely to stabilize as the “kettles”, or independent refineries, reach their maximum annual crude import quotas.

With coronavirus cases on the rise in several U.S. states, the country’s crude stocks rose by 3 million barrels in the week through Sept. 4, data from the American Petroleum Institute (API) showed. Wednesday. That’s compared to analysts’ forecasts for a 1.4 million barrel extraction.

“If the EIA confirms a crude build-up later today, it would be the first US equity build since mid-July,” ING analysts said.

The EIA has already lowered its forecast for global oil demand growth for 2020 by 210,000 barrels per day to 8.32 million bpd.

In another bearish sign, major commodity traders are reserving tanker trucks to store crude oil and diesel in the water, with supply outstripping consumption, according to trade sources and shipping data.

The increase in stocks comes ahead of a Sept. 17 meeting of the market monitoring panel of the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, known collectively as OPEC +, which in August cut the supply restrictions earlier this year due to expectations. demand would improve.

“This issue will be front and center … next week, where we expect a strong statement that if markets continue to weaken, the grower group will be prepared to cut production further,” Citi analysts said in a note. .