Receive our newsletter – data, insights and analysis delivered to you
  1. News
June 24, 2020

Oil prices edge lower as US crude inventories increase

Oil prices have edged down due to an increase in US crude inventories by a much bigger than expected 1.7 million barrels last week.

By Himaja Ganta

Oil prices have edged down due to an increase in US crude inventories by a much bigger than expected 1.7 million barrels last week.

The decline, which extended losses from the previous day, added to oversupply concerns.

Brent crude slipped $0.29 or 0.7% at $42.34 a barrel, while US West Texas Intermediate (WTI) crude futures were down $0.35 or 0.9% to $40.02 a barrel, Reuters reported.

Data related to the rise in US crude oil inventories was released by industry group the American Petroleum Institute (API).

API data further reported a fall in gasoline inventories, feeding hopes that fuel demand is picking up as some nations lifted lockdowns which have been imposed to limit the spread of the Covid-19 pandemic.

Sunward Trading chief analyst Chiyoki Chen was quoted by the news agency as saying: “Some investors took profits after the recent rally as they saw higher US crude stockpiles.”

Content from our partners
Green investment: What gives Scotland multiple advantages
How the North of Tyne region is leveraging its legacy to define its future
Q&A with Chevron Lubricants’ Paul Sly, global industrial OEM specialist, and Nathan Knotts, global brand technical manager

On 23 June, both the benchmarks traded at their highest levels since prices crashed in early March this year.

The Organization of the Petroleum Exporting Countries (OPEC), including Russia and other producers, together known as OPEC+, have been reducing supply by about 9.7Mbpd since 1 May.

Earlier this month, the group also agreed to extend output cuts until the end of next month.

According to Fujitomi chief analyst Kazuhiko Saito, the market still remains worried about an increasing number of Covid-19 cases in the US and elsewhere.

In the week that ended on 21 June, new Covid-19 infections rose 25% in the US.

The death toll in Latin America has surpassed 100,000 on 23 June, according to a Reuters tally.

Chiyoki Chen added: “We expect Brent to be traded between $35-45 a barrel for the next week as concerns over a second wave of the coronavirus pandemic will limit gains, while reduced supply from OPEC+ will lend support.”

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