Oil Prices Dip as U.S Energy Agency Announces Inventories Rise

Oil Prices Dip as U.S Energy Agency Announces Inventories Rise

Oil prices dip on Wednesday over an expected rise in United States crude inventories amidst rising cases of coronavirus in India and recent travel restriction between several countries. Oil market reacted negatively after the Energy Information Administration (IEA) reported an inventory build of 600,000 barrels for the week.

This compared with a decline in inventories of 5.9 million barrels for the previous week and analyst expectations for a draw of 2.86 million barrels. A day earlier, the American Petroleum Institute reported a modest inventory build of less than half a million barrels.

In gasoline, the EIA estimated an inventory increase of 100,000 barrels for the week to April 16, versus a build of 300,000 barrels for the previous week. Gasoline production averaged 9.4 million bpd, versus 9.6 million bpd a week earlier.

International benchmark Brent crude was trading at $66.42 per barrel at 0709 GMT for a 0.22% decrease after closing Tuesday at $66.57 a barrel.

American benchmark West Texas Intermediate (WTI) was at $62.49 per barrel at the same time for a 0.28% drop after it ended the previous session at $62.67 a barrel.

Late Tuesday, the American Petroleum Institute (API) announced its estimate of a rise of over 436,000 barrels in US crude oil inventories relative to the market expectation of a fall of 2.8 million barrels.

The forecast rise in the country’s inventories signaled falling crude demand in the US, the world’s largest oil consumer, to weigh on oil prices.

Adding to lingering oil demand fears, several countries around the globe remain in the grip of recurring waves of the COVID-19 pandemic.

The worldwide case count is now close to 143 million, including a death toll of more than 3 million, according to a running tally from the Johns Hopkins University in the US.

Daily COVID-19 cases reached a new high in India, one of the world’s biggest importers, after the country registered 295,041 infections, taking the country’s total to 15.6 million, while the virus-linked death toll reached 182,553.

The number of new single-day fatalities in India reached 2,023, the highest toll since the pandemic began last year.

Tightening mitigation measures, including travel restrictions between countries, followed the rise in virus cases. After the UK and Pakistan began banning flights to India, the US State Department also boosted its “Do Not Travel” guidance to about 80% of all countries due to “unprecedented risk to travelers” from the coronavirus pandemic.

There are already nearly three dozen countries on the “Level 4: Do Not Travel” list, including Brazil, Russia, Argentina, Chad, Kosovo, Kenya, Haiti, Mozambique, and Tanzania.

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Oil Prices Dip as U.S Energy Agency Announces Inventories Rise