Oil prices slip as US crude stocks soar

22 July 2020 (Last Updated July 22nd, 2020 10:23)

Oil prices slipped on reports of an unexpected build-up in US crude stocks while Covid-19 continues to affect demand.

Oil prices slip as US crude stocks soar
Brent crude dropped $0.32 to trade at $44 per barrel. Credit: Keri Jackson from Pixabay.

Oil prices slipped on reports of an unexpected build-up in US crude stocks while Covid-19 continues to affect demand.

This comes after the US President Donald Trump noted that the pandemic may worsen before the situation improves.

Brent crude dropped $0.32 to $44 per barrel, while the US West Texas Intermediate (WTI) crude fell $0.33 to trade at $41.59, reported Reuters.

Earlier, industry group American Petroleum Institute (API) reported that crude inventories in the US increased by 7.5 million barrels. The figure is significantly bigger compared to the forecast of a 2.1 million rise in stocks.

The official data will be released by the US Energy Information Administration (EIA) later today.

OANDA senior market analyst Edward Moya was quoted by the news agency as saying: “Crude’s rally hit a brick wall after the API report showed a sharp rise in stockpiles and on President Trump’s warning that the coronavirus pandemic in the US is likely to worsen.

“The crude demand outlook just got a double whammy with what could be the biggest rise in stockpiles since late May if confirmed by the EIA report tomorrow and on Trump’s downbeat virus briefing.”

In previous sessions, oil prices improved after European Union (EU) lenders agreed to invest €750bn ($859bn) to support coronavirus-hit economies and on positive news in vaccine development.