Oil prices slip as U.S. inventory build stokes fears of supply glut
Oil prices eased on Wednesday after a surprise build-up in U.S. crude stockpiles stoked concerns about a global supply glut even as a spike in global COVID-19 cases fuelled fears of slower recovery in fuel demand, Reuters reports.
Brent crude futures for December delivery were at $42.93 a barrel, down 23 cents, or 0.5%, as of 0332 GMT, while December U.S. West Texas Intermediate (WTI) crude futures slipped 20 cents, or 0.5%, to $41.50 a barrel. Both benchmarks rose in the previous session.
“A U.S. inventory build, together with the recent resurgence of the COVID-19 cases worldwide, prompted investors to make position adjustments,” said Chiyoki Chen, chief analyst at commodity broker Sunward Trading.
Crude inventories rose by 584,000 barrels in the week to Oct. 16 to about 490.6 million barrels, data from industry group the American Petroleum Institute showed, compared with analysts’ expectations in a Reuters poll for a draw of 1 million barrels.
Adding to pressure, worldwide COVID-19 cases crossed 40 million on Tuesday, with some parts of Europe imposing renewed lockdown measures.
On the supply side, Russia’s energy minister said on Tuesday it was too early to discuss the future of global oil production curbs beyond December, less than a week after saying plans to scale back existing output restrictions should proceed.
Earlier this year the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia - together known as OPEC+ - agreed to trim production cuts in January from a current 7.7 million barrels per day (bpd) to roughly 5.7 million bpd.