Oil posts second straight weekly plunge as stockpiles soar, demand dwindles

14 Sept 20-US and UK futures’ prices were little changed on Friday, but both of the oil futures had been whacked away as much as 6 per cent this week and had reported their second straight weekly percentage decline in a row as crude oil stockpiles are rising all over the globe and gasoline demands appear to have met with an unfathomable scale of struggle to bounce back to a pre-pandemic level.

In point of fact, both US WTI (West Texas Intermediate) and UK crude futures’ prices had shrugged off over 6 per cent this week as beforementioned, as the week had revealed a cascade of dismal data that signalled an abundance in market supply, while a latest move from Saudi and Kuwait to slash the official selling prices of their Arab crude for Asia, had reaffirmed a strident supply glut.

Aside from that, as productions in the US refineries across the Gulf of Mexico had been paused due to the Hurricane Laura, a category 4 Atlantic hurricane which has been the strongest ever to make landfall in the US state of Louisiana, Thursday’s US Energy Information Administration data had unveiled a surprise gain in US crude stockpile.

Citing statistics, on Friday’s commodity market round off, Brent crude futures’ prices fell by 0.6 per cent to $39.83 per barrel, while US West Texas Intermediate (WTI) crude futures’ prices ended the day almost flatlined at $37.33 a barrel.

In factuality, the weekly percentage decline in crude oil futures’ prices came against a baleful backdrop of a number of inflammatory indicators that suggested a protracted and paradoxical recovery from the pandemic-induced fiscal slump, while addressing to an oversupply fear brewing in the crude oil markets, Commerzbank analysts wrote in a client note, “The financial markets are continuing to set the tone, including on the oil market… fears about an oversupply have added to the general feeling of uncertainty. ”