Oil prices slide on concerns about patchy demand recovery, record U.S. stocks

By Sonali Paul MELBOURNE (Reuters) - Oil prices fell in early trade on Thursday on worries about slow demand growth with coronavirus cases rising, U.S. crude stockpiles hitting an all-time high and the U.S

Reuters June 11, 2020 07:05:17 IST
Oil prices slide on concerns about patchy demand recovery, record U.S. stocks

Oil prices slide on concerns about patchy demand recovery record US stocks

By Sonali Paul

MELBOURNE (Reuters) - Oil prices fell in early trade on Thursday on worries about slow demand growth with coronavirus cases rising, U.S. crude stockpiles hitting an all-time high and the U.S. Federal Reserve projecting recovery from the pandemic would take years.

U.S. West Texas Intermediate (WTI) crude futures erased gains from Wednesday, falling as low as $38.42 a barrel. The benchmark contract was down 2.2%, or 86 cents, at $38.74 at 0031 GMT.

Brent crude futures fell 2.0%, or 85 cents, to $40.88 a barrel, also giving up gains from Wednesday.

Analysts said following a doubling in prices since April, traders were selling into any negative news.

"The recent rally in crude oil prices stalled as rising inventories showed the path to a recovery will be a rocky one," ANZ analysts said in a note.

U.S. crude inventories rose unexpectedly by 5.7 million barrels in the week to June 5 to 538.1 million barrels - a record - as imports were boosted by the arrival of supplies bought by refiners when Saudi Arabia flooded the market in March and April, data from the Energy Information Administration showed.

At the same time, gasoline stockpiles grew more than expected to 258.7 million barrels. Distillate stockpiles, which include diesel and heating oil, rose by 1.6 million barrels, but the increase was smaller than in previous weeks.

Adding to the negative sentiment, the U.S. Federal Reserve said the world's largest economy would shrink 6.5% this year and the unemployment rate would be at 9.3% at the end of 2020 in its first projections of the pandemic era.

"Short-term and fast money traders are very much inclined to sell outright or to take profits on any hint of bearish data," said Stephen Innes, chief global market strategist at Axicorp.

In a further sign that recovery will continued to be overshadowed by the coronavirus , total U.S. cases topped 2 million on Wednesday, with new infections rising slightly after five weeks of declines, according to a Reuters analysis.

(Reporting by Sonali Paul; Editing by Kenneth Maxwell)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.