Oil Prices Drop Large as Virus Stokes Demand Worries
Oil extended losses for a sixth consecutive day falling over 2% and recording the largest drop in more than a year over the double whammy of an unexpected build in US gasoline stockpiles and the rise in coronavirus cases which spurred demand fears.
The crude oil market has been descending due to health pressure and lockdowns in top world economics, casting fear on the expected demand pattern in the next few months.
International benchmark Brent crude was trading at $66.78 per barrel, plunged 2.13% after closing Wednesday at $68.23 a barrel. American benchmark West Texas Intermediate (WTI) traded at $63.48 a barrel at the same time with a 2.65% decrease after ending the previous session at $65.21 per barrel.
Crude oil inventories, however, decreased by 3.2 million barrels, or 0.7%, during the same period.
The surprise rise in US gasoline stocks came as coronavirus-related deaths spiked in the country. The US reported more than 1,000 COVID-19 deaths as of Thursday, according to the data tracking website Worldometer.
Oil prices dropped to their lowest level since May 24 and came under pressure after the US Energy Information Administration (EIA) announced Wednesday that the country’s gasoline inventories rose by 700,000 barrels to 228.2 million barrels during the week ending August 13.
Meanwhile, analysts said the slowdown in the Chinese economy is also another factor that is exerting pressure on oil prices.
Industrial production rose 6.4% in July from the same month a year ago, but well below market estimates of 7.8%. Retail sales were up 8.5%, again much lower than the 11.5% expectation.
The country’s daily coronavirus deaths stood at more than 1,400 as of Thursday while the number of the new cases reached over 70,000.
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Oil Prices Drop Large as Virus Stokes Demand Worries
