Oil prices fall in early trade after data shows rise in US crude inventories; concerns mount about new viral outbreaks

Saudi Arabia’s cabinet has urged OPEC+ countries to reduce oil output further to restore balance in global crude markets, the country’s state news agency reported early on Wednesday

Reuters May 13, 2020 07:37:15 IST
Oil prices fall in early trade after data shows rise in US crude inventories; concerns mount about new viral outbreaks

Tokyo: Oil prices fell in early Asian trading on Wednesday after industry data showed a rise in US crude inventories and concerns mount about a possible second wave of the coronavirus pandemic in countries easing lockdowns.

Traders shrugged off a further call by Saudi Arabia for larger production cuts to balance the market following a virus-induced demand slump, after OPEC’s biggest producer said earlier this week it planned to add to cut again.

Brent crude LCOc1 was down 49 cents, or 1.6 percent, at $29.49 by 0034 GMT, having risen 1.2 percent on Tuesday. US crude was down 41 cents, or 1.6 percent, at $25.37 a barrel, after jumping nearly 7 percent in the previous session.

“While the market feels more comfortable on the supply side of the equation, on the demand side, the focus will continue to revolve around the risks of easing lockdowns,” said Stephen Innes, chief markets strategist at AxiCorp.

Oil prices fall in early trade after data shows rise in US crude inventories concerns mount about new viral outbreaks

Representative image. Reuters

US infectious disease expert Anthony Fauci on Tuesday told Congress that easing coronavirus lockdowns may set off new outbreaks of the illness, which has killed 80,000 Americans and badly damaged the world’s biggest economy.

New outbreaks have been reported in South Korea and in China, where the health crisis started before spreading around the world, prompting governments to lock down billions of people, devastating economies and demand for oil.

On the supply side, Saudi Arabia’s cabinet has urged OPEC+ countries to reduce oil output further to restore balance in global crude markets, the country’s state news agency reported early on Wednesday.

On Monday, Saudia Arabia said it would add to planned cuts by reducing production by a further 1 million barrels per day (bpd) next month, bringing output down to 7.5 million bpd.

The Organization of the Petroleum Export Countries (OPEC) and other producers such as Russia - a group known as OPEC+ - agreed to cut output by 9.7 million barrels per day (bpd) in May and June, a record reduction, in response to a 30 percent fall in global fuel demand.

In the United States, inventories of crude oil rose by 7.6 million barrels last week to 526.2 million barrels, against analysts’ expectations for an increase of 4.1 million barrels.

Official storage data from the US Energy Information Administration is due later on Wednesday.

Updated Date:

Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.

also read

Centre, in Parliament's Monsoon Session, says no data available on death of migrant workers during lockdown
India

Centre, in Parliament's Monsoon Session, says no data available on death of migrant workers during lockdown

Responding to a question, Union minister Santosh Gangwar said the Central government has taken numerous measures to provide migrant labourers with financial assistance, food packages and other benefits

Human, animal footprints dating back to 120,000 found in Nefud Desert in Saudi Arabia
science

Human, animal footprints dating back to 120,000 found in Nefud Desert in Saudi Arabia

The fossils were first recorded for Homo sapiens outside of Africa between roughly 210 and 180 thousand years in southern Greece and the Levant.

'You didn't count so no one died?': Rahul Gandhi attacks Centre on migrant deaths, says govt is 'unaffected'
India

'You didn't count so no one died?': Rahul Gandhi attacks Centre on migrant deaths, says govt is 'unaffected'

The Congress leader in a tweet said that the BJP-led Centre does not know how many migrant labourers died and how many jobs were lost during the lockdown