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NEW YORK: Oil prices inched lower on Wednesday, as rising US crude inventories and an increase in US coronavirus infections put the brakes on a price recovery sparked by easing lockdowns.
Brent crude futures fell 19 cents to $42.89 a barrel by 11:23 AM EDT (1523 GMT). US West Texas Intermediate (WTI) crude futures fell 23 to at $40.39 a barrel.Both benchmarks are set for a fourth session of daily percentage changes of less 1 per cent in either direction, shrugging off news that OPEC member Libya was adding to global supplies by reopening its Es Sider oil terminal for exports.
US Gulf Coast crude oil stockpiles rose by 5 million barrels to a record high of 309 million barrels last week even as refineries hiked output, the Energy Information Administration said on Wednesday.Gasoline inventories decreased sharply by 4.8 million barrels and distillate inventories rose.
“While a big draw on gasoline in the summertime is healthy, the US is really close to all time record highs in crude oil and distillate storage, which is not as healthy,” said Bob Yawger, director of energy futures at Mizuho.
The latest surge in US coronavirus cases, taking the US total above 3 million, has reduced hopes for a swift recovery in oil demand which has been hammered by the global lockdowns to prevent the virus spreading.
Key ministers in OPEC+, which includes OPEC, Russia and other producers, were due to hold talks next week about their deal on record output cuts that will run to the end of July and then start tapering. In addition to Libya, Abu Dhabi National Oil Co (ADNOC) plans to boost oil exports in August, suggesting OPEC+ countries are preparing to ease output cuts, sources told Reuters.