Oil down over renewed fears of a supply glut
LONDON, June 11, 2020 – Oil retreated on Thursday morning in Asia, giving up its gains from the previous session after the black liquid’s recent rally was challenged by fears of a supply glut and fragile demand.
Brent oil futures were down 0.97% to $40.82 by 9:40 PM ET (2:40 AM GMT) and WTI futures slid 2.45% to $38.63.
The Energy Information Administration (EIA) predicted a build of 5.720 million barrels for the previous week on Wednesday, against analyst expectations of a 1.738 million-barrel draw in forecasts prepared by Investing.com.
EIA’s prediction followed the American Petroleum Institute (API) prediction of a whopping 8.4 million-barrel build on Tuesday, increasing fears of an oversupply.
The US Federal Reserve’s grim warning on Wednesday that US recovery from the Covid-19 virus will be a long and tough road also soured investor sentiment. The US economy is predicted to shrink by 6.5% and the unemployment rate to 9.30% by the end of the year.
“Short-term and fast money traders are very much inclined to sell outright or to take profits on any hint of bearish data,” Stephen Innes, chief global market strategist at Axicorp, told Reuters.
Meanwhile, the US recorded almost 2 million Covid-19 cases as of June 11, according to data from Johns Hopkins University.
By Investing.com: https://www.investing.com/news/commodities-news/oil-down-over-renewed-fears-of-a-supply-glut-2198583