Oil down as rising stockpiles point to slow recovery
LONDON, September 10, 2020 – Paring back on overnight gains, oil slipped in early trade on Thursday due to concerns about fuel demand after data showed US crude stockpiles rose last week and COVID-19 cases continued to grow worldwide.
There are almost 28 million COVID-19 cases globally as of September 10, according to Johns Hopkins University data.
Brent oil futures were down 0.42% to $40.62 by 11:25 PM ET (4:25 AM GMT) and WTI Futures fell 0.63% to $37.8, remaining below the $40-mark.
As COVID-19 cases rise in several U.S. states, the American Petroleum Institute (API)on Wednesday reported a 2.970 barrel-build in the country’s crude stockpiles for the week ending September 4, compared to the 6.360 barrel-draw seen in the previous week’s data.
The US Energy Information Administration (EIA) is expected to put out official weekly inventory data on Thursday, a day later than normal due to the US Labor Day holiday.
Leading commodity traders are also booking tankers to store crude oil and diesel on the water as supply outpaces consumption, according to trading sources and shipping data.
The Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, together known as OPEC+, had trimmed supply curbs in August on expectations demand would improve. It is expected to be a topic of discussion on the table at a meeting of the organization’s market monitoring panel on Sept. 17.
“This issue will be front and centre … next week, where we expect a strong statement that if markets continue to weaken, the producer group will be prepared to trim output further,” stated Citi analysts in a note.