Oil’s Losses Abound Over Supplies Swell, Weak Demand By Investing.com

© Reuters.

By David Ho

Investing.com – Oil prices further declined on Friday, hit by an unexpected rise in U.S. stockpiles and slow demand from the COVID-19 pandemic.

The U.S. Energy Information Administration (EIA) on Thursday reported a in crude inventories for the week ended September 4 against expectations of a 1.335 million-barrel draw.  EIA’s figures follow the American Petroleum Institute’s report earlier in the week of a .

fell 0.57% to $39.83 by 11:20 PM ET (11:20 AM GMT) and were down 0.43% to $37.14. Both benchmarks slid below the $40 -mark after sliding up to 2% and 2% respectively during the previous session.

In the U.S., refineries slowly returned to operations after production sites were shut down due to storms in the Gulf of Mexico and wider region earlier in the month. The resumption of operations caused stockpiles to rise last week against expectations.

“Crude production is starting to return following a couple of storms, but a weak demand outlook and the start of maintenance season will keep the pressure on oil prices,” OANDA senior market analyst Edward Moya told Reuters.

As a stalled economic recovery from COVID-19 continues, traders also started to book tankers again to store crude oil and diesel.

Oversupply worries continued to mount, with onshore storage near capacity and supplies continuing to outpace demand. Traders are now starting to use floating storage due to cheap financing costs, and the spread between contracts for delivery now and the future makes it better to hold oil for sale later.

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by : Investing.com

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