New Telegraph

Oil prices down again with rise in US crude inventory

 

 

<span;>Oil prices fell on Wednesday after an industry group reported a surprise rise in U.S. crude inventory, and Libya pumping more oil for export.

<span;>Brent crude was trading down 30 cents or 0.7 per cent at $41.42 a barrel by 0347 GMT, after gaining 28 cents on Tuesday while U.S. crude dropped 34 cents or 0.9 per cent to $39.46.

<span;>Both contracts fell more than four per cent on Monday, the most in two weeks, reports Reuters.

<span;>Surging cases of coronavirus infections in countries including France and Spain, along with the likelihood of more restrictions in Britain have renewed worries about fuel demand.

<span;>More supply is also expected in the market from Libya.

<span;>In the U.S., where the death toll from COVID-19 has passed 200,000, the world’s highest, crude oil inventories rose by 691,000 barrels in the week to September 18, according to industry data, compared with analysts’ forecasts for a drop of 2.3 million barrels.

<span;>Gasoline stocks fell by nearly 7.7 million barrels, nearly eight times expectations suggesting some demand for fuel in the world’s biggest oil consuming nation.

<span;>Official data from the Energy Information Administration is due out later on Wednesday.

<span;>“Official U.S. crude inventory data assumes greater than usual importance,’’ said Jeffrey Halley, senior market analyst at OANDA.

<span;>“A surprise increase could well be enough to initiate another downward leg in crude prices.’’

<span;>In Libya, the National Oil Company expects oil output to rise to more than a quarter of a million barrels per day (bpd) by next week, it said on Tuesday.

<span;>The NOC said it was restarting exports from the Zueitinia oil terminal after checking the security situation at the port and fields that pipe crude there.

<span;>An escalation in the country’s conflict led to a blockade of facilities, which is now easing, although analysts say they don’t expect Libya to reach the 1.2 million bpd of production it was pumping previously.

<span;>This year, “world oil demand will be down by more than 10 per cent on the year to around 90 million barrels per day (bpd) due to the COVID-19 crisis,’’ Eurasia Group said in a note.

<span;>“This will mark the biggest demand shock in industry history,’’ it said.

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