Coronavirus: Oil prices fall as demand growth concerns outweigh stock drawdown

Andrew Cummings
September 27, 2020

On Wednesday, prices climbed slightly after government data showed US oil inventories fell last week.

ETAutoOn Wednesday, prices climbed slightly after government data showed USA oil inventories fell last week.

Brent crude futures settled at $41.92 a barrel, down two cents while U.S. West Texas Intermediate (WTI) crude futures lost six cents to $40.25 a barrel.

The profit from producing fuels from benchmark Dubai crude at a refinery in Singapore was 26 cents a barrel on Thursday, down from $8.03 a year earlier.

United States gasoline stocks fell by 4 million barrels in the week to 227.5 million barrels, the EIA said, compared with analysts' expectations in a Reuters poll for a 648,000-barrel drop.?

Still, fuel demand in the USA stays suppressed as the coronavirus pandemic limitations travel. The four-week average gasoline demand last week was down 9% from a year earlier, government data showed.

"The current economic and oil backdrop is anything but encouraging and this capped the attempted rally", Tamas Varga of oil brokerage PVM said.

Oil prices rose on Friday but are on track for a weekly fall because of rising concerns about the global resurgence of coronavirus infections and its effects on fuel demand, while the likely return of exports from Libya will add to supply.

Yet it was all for naught after Fed Chair Jay Powell pancaked global markets with a discordant economic warning and a penetrating call out for more stimulus to congress, both of which brought the oil price recovery to a screeching halt with nervous investors seeking out the USA dollar's safety.

Britain, Germany and France imposed new restrictions to stem the coronavirus spread - all factors affecting fuel demand.

Prices fell as U.S. Federal Reserve officials cautioned of deferred economic improvement and on figures of a delay in market activity in September.

Libya has recently boosted production and Shell has provisionally booked the first crude tanker to load at Libya's Zueitina terminal since January.

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