Oil prices up despite oversupply fears
LONDON, April 8, 2020 – Oil prices swung up in Asia on Wednesday morning as they rebounded from sharp losses during the previous session.
The past two sessions took the black liquid on a rollercoaster ride as International Brent Oil futures rose 1.95% to $32.49 from its slump of almost 10% in the last session by 10:13 PM ET (3:13 AM GMT). US Crude Oil WTI futures clawed back its loss of 3.57% as it jumped 5.12% to $24.84.
Prices dropped overnight as the American Petroleum Institute (API) estimated a huge build of 11.9 million barrels in the US crude oil inventory for the week ending April 3. Investors still worried about an oversupply against plummeting demand as they compared the estimate to analyst forecasts of a 9.3-million-barrel build prepared by Investing.com.
They will have to wait and see for the results of OPEC+’s online on Thursday to discuss and attempt to resolve the ongoing price war between Russia and Saudi Arabia.
But some are already worried that the meeting will not be enough.
“With 28 million bpd of oversupply in the oil market in April and 21 million bpd in May, the global coordinated production cuts that are really needed may be too large for the producers to accept; perhaps twice as large as the numbers being discussed,” Rystad Energy’s Bjornar Tonhaugen told CNBC.