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.