SINGAPORE CITY (SINGAPORE) – Oil prices went higher on Thursday, as gains came with a surprise build in US crude oil inventories, despite a continuous surge in coronavirus cases hampering a recovery in fuel demand.
US crude and distillate inventories saw an unexpected rise and fuel demand came down in the most recent week, the Energy Information Administration said on Wednesday.
While Brent crude rose 7 cents, or 0.2%, to $44.36 a barrel by 0545 GMT, US West Texas Intermediate (WTI) crude attained 8 cents, or 0.2%, to $41.98 a barrel.
ANZ said, while referring to usual demand during the peak US summer driving season, “Normally inventories of fuel would be heavily drawn upon, but the surge in COVID-19 case numbers has stymied the recovery.”
Crude inventories increased by 4.9 million barrels in the week to July 17 to 536.6 million barrels, when compared with the estimates for a 2.1 million-barrel drop.
Avtar Sandu, commodities manager at Phillip Futures, said, “The crude market is astonishingly quiet with the EIA surprise inventories build and tensions between trading giants US and China escalating.”
Despite a fresh dispute between Washington and Beijing, some analysts are hoping that markets would not be impacted to a greater extent.
Jeffrey Halley, a senior market analyst at OANDA, said, “Geopolitical concerns have been set aside with energy markets sensing that a new US-China trade war, derailing the global recovery, an unlikely outcome.”
The economic data from Japan has been weak, and given that the country is the world’s fourth-largest oil consumer, it indirectly has had a weight on prices.
The oil market is likely to head towards the direction from consumer confidence data expected from Europe later in the day.
(Photos syndicated via Reuters)
This story has been edited by BH staff and is published from a syndicated field.
