Oil prices have slipped after data released by the American Petroleum Institute (API) showed an unexpected rise in the US crude stocks last week.
With Covid-19 infections surging in many nations, there are also concerns over recovery in fuel demand.
Brent crude LCOc1 fell by $0.17, or 0.42%, to reach at $40.62 a barrel, while US West Texas Intermediate (WTI) CLc1 futures were down by $0.24, or 0.63%, to settle at $37.81 a barrel, Reuters reported.
According to API data, US crude stocks rose by three million barrels in the week ending 4 September.
Reuters cited ANZ analysts as saying in a note that the oil market is under pressure as a result of the weak demand and rising supply.
ANZ said: “(Refinery) maintenance season and a cautious approach from refiners should keep crude oil demand soft.”
Industry group US Energy Information Administration (EIA) will release official weekly inventory data later today.
ING analysts said: “If the EIA confirms a crude oil build later today, it would be the first US stock build since mid-July.
The EIA already reduced its 2020 oil demand growth forecast by 210,000bpd to 8.32Mbpd.
According to trading sources and shipping data, major commodity traders are booking tankers for crude oil and diesel storage on the water, with supply increasing faster than consumption.
The rising stocks come ahead of a meeting of the market monitoring panel of the Organization of the Petroleum Exporting Countries (OPEC), and its allies, together known as OPEC+, on 17 September.
Citi analysts said in a note: “This issue will be front and centre. Next week, where we expect a strong statement that if markets continue to weaken, the producer group will be prepared to trim output further.”
