Oil edges lower as U.S. inventory build stokes supply fears
Oil prices dipped on Wednesday after industry data showing a build in U.S. crude stockpiles added to worries about oversupply, but hopes for a swift economic recovery in China limited losses, Reuters reports.
Brent crude futures fell 10 cents, or 0.2%, to $42.98 a barrel by 0417 GMT. U.S. West Texas Intermediate (WTI) crude futures dropped 12 cents, or 0.3%, to $40.50 a barrel, holding to the narrow range of the past few weeks.
“The market is mixed as optimism about China’s quick economic rebound is offset by persistent worries that the rising coronavirus cases in the United States and other areas will stall a recovery in fuel demand,” said Satoru Yoshida, a commodity analyst with Rakuten Securities.
“We expect the WTI to stay in the $38.50-$41.50 range for the next couple of weeks,” he added.
U.S. crude oil stockpiles rose last week, against expectations for a draw, although gasoline and distillate inventories fell more than expected, data from industry group the American Petroleum Institute showed.
Adding to pressure, the U.S. Energy Information Administration (EIA) said on Tuesday that U.S. crude oil production is expected to fall by 600,000 barrels per day (bpd) in 2020, a smaller decline than the 670,000 bpd it forecast previously.
However, it also expected global oil demand to recover through the end of 2021.