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.
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.”
In 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.