View all newsletters
Receive our newsletter - data, insights and analysis delivered to you
  1. News
May 6, 2020

Oil prices dip due to rise in US crude inventories

Oil prices have edged-down as higher than expected rise in US crude inventories has raised concerns over supply glut amid a slump in demand due to coronavirus.

By Himaja Ganta

Oil prices have edged-down as higher than expected rise in US crude inventories has raised concerns over supply glut amid a slump in demand due to coronavirus.

US West Texas Intermediate (WTI) crude futures were down $0.27, or 1.1%, to $24.29a barrel, at 0436 GMT, while Brent crude LCOc1 futures fell $0.20 to $30.77 a barrel at this time, Reuters reported.

According to the data from the American Petroleum Institute (API), oil prices slipped after a report indicated a rise of 8.4 million barrels in the US crude inventories last week.

National Australia Bank commodity strategy head Lachlan Shaw was quoted by the news agency as saying: “We’re talking about normalisation of supply and demand but we’ve got a long way to go.”

SK Innovation, the South Korea-based owner of refining firm SK Energy, said that it expects refining margins in the second quarter to be under pressure due to weak fuel demand and a glut in refined products as a result of the pandemic.

Analysts also cited comments by US-based hydrocarbon exploration firm Diamondback Energy, which stated that it would consider reviving drilling plans if WTI crude futures are held above $30 per barrel. This signals that shale producers do not intend to shut  production for a long period.

Meanwhile, investors are awaiting official inventory data from Energy Information Administration (EIA), which is due to be released later today.

Related Companies

NEWSLETTER Sign up Tick the boxes of the newsletters you would like to receive. The top stories of the day delivered to you every weekday. A weekly roundup of the latest news and analysis, sent every Friday. The industry's most comprehensive news and information delivered every month.
I consent to GlobalData UK Limited collecting my details provided via this form in accordance with the Privacy Policy
SUBSCRIBED

THANK YOU

Thank you for subscribing to Offshore Technology