Oil prices have edged-down by 4% on concerns about slow demand recovery as coronavirus (Covid-19) cases continue to rise.
Brent crude futures fell 3.4%, or $1.42, to $40.31 per barrel, while West Texas Intermediate (WTI) futures declined 4%, or $1.60, to $38 a barrel, Reuters reported.
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Data from industry group Energy Information Administration (EIA) highlighted a rise in the US crude inventories by about 5.7 million barrels in the week that ended on 5 June.
Meanwhile, diesel and heating oil rose by 1.6 million barrels last week.
Commonwealth Bank commodities analyst Vivek Dhar was quoted by the news agency as saying: “Most of the (price) gains have come from when strict lockdowns were lifted. Coming back to where it was pre-Covid – that will take some time.
“The key for markets to feel like the worst is over is: when will stockpiles peak globally. That’s what the market is paying attention to.”
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By GlobalDataIn its initial projections of the coronavirus pandemic era, the US Federal Reserve said that the country’s economy is predicted to shrink 6.5% this year and the unemployment rate would be at 9.3% by the end of this year.
Axicorp chief global market strategist Stephen Innes said: “Short-term and fast money traders are very much inclined to sell outright or to take profits on any hint of bearish data.”
The total number of Covid-19 cases in the US have surpassed two million, according to a Reuters tally. New infections have increased slightly after five weeks of declined number of cases.
