Oil prices lost more than 5% on Wednesday as evidence of an increase in coronavirus cases in many countries raised questions about efforts to restart global economies and data from the US government. USA They reveal a third consecutive weekly increase in national crude inventories.
“The real concern is the emergence of [COVID-19] cases in several states, “including California, Texas and Florida, Tariq Zahir, managing member of Tyche Capital Advisors, told MarketWatch, adding that these are not small states. There are concerns about a possible reduction in the reopening of the economy and concerns on consumer demand, he said.
The World Health Organization noted the increase in coronavirus cases in the US. The US, China and Latin America, reigniting concerns about a possible second wave of the epidemic.
The International Monetary Fund also cut its 2020 economic forecast to 4.9% negative on Wednesday, saying the coronavirus pandemic has caused an unprecedented decline in global activity.
“If the pandemic triggers a second round of blockades, [oil] storage will have a difficult time accommodating unused oil and the increase in gasoline that we currently see will be removed if new travel restrictions are put in place, “Paola Rodríguez Masiu, senior analyst for oil markets at Rystad Energy, wrote in a report Wednesday.
West Texas Intermediate Crude Oil for August CLQ20,
It fell $ 2.36, or almost 5.9%, to settle at $ 38.01 a barrel on the New York Mercantile Exchange. That was the lowest finish for a first-month deal in a week, according to Dow Jones Market Data.
Brent world reference oil for delivery in August BRNQ20,
It fell $ 2.32, or 5.4%, to $ 40.31 a barrel on ICE Futures Europe, the lowest since June 15.
“Oil became an easy target for eager investors … thanks to the increase in coronavirus cases worldwide and a reported increase in crude inventories,” said Lukman Otunuga, senior research analyst at FXTM. The recent decline in oil prices “remains strongly influenced by demand-side dynamics” despite efforts by the Organization of the Petroleum Exporting Countries and its allies to rebalance markets, he told MarketWatch.
The Energy Information Administration reported Wednesday that US crude inventories. USA They rose for the third consecutive week, by 1.4 million barrels for the week ending June 19. Compared to a forecast by analysts surveyed by S&P Global Platts for an average decrease of 100,000 barrels. The American Petroleum Institute reported a rise of approximately 1.7 million barrels on Tuesday.
EIA data also showed that crude stocks at the Cushing, Oklahoma, storage facility fell by approximately 1 million barrels during the week, but total national oil production increased by 500,000 barrels per day to 11 million barrels. barrels per day.
Gasoline supply decreased by 1.7 million barrels, while distillate stocks increased by 249,000 barrels. The S&P Global Platts survey showed expectations of a 1.9 million barrel supply decline for gasoline and a 100,000 barrel increase for distillate inventories.
At Nymex, July RBN20 gasoline,
it fell 7.9% to $ 1.1964 per gallon and July heating up HON20,
it settled at $ 1.1508 per gallon, down 4.3%.
Prior to an EIA supply update due Thursday, July for NGN20 natural gas
lost 2.4% to $ 1,597 per million British thermal units.