Oil falls After Surprise Rise In U.S. Crude Inventories

Oil prices fell on Wednesday after an industry group reported a rise in U.S. crude inventories against expectations for a decline, adding to worries about demand that led to a steep selloff earlier in the week.

Brent crude was trading down 21 cents, or 0.5 per cent, at $41.51 a barrel by 0055 GMT, after gaining 28 cents on Tuesday, while U.S. crude slipped 23 cents, or 0.6, to $39.57.

Both contracts fell more than 4 per cent on Monday, the most in two weeks.

Surging cases of coronavirus infections in countries including France and Spain, along with the likelihood of more restrictions in Britain have renewed worries about fuel demand, just as more supply may come onto the market from Libya.

In the United States, where the death toll from COVID-19 has passed 200,000, the world’s highest, crude oil inventories rose by 691,000 barrels in the week to Sept. 18, according to industry data, compared with analysts’ forecasts for a drop of 2.3 million barrels.

Gasoline stocks fell by nearly 7.7 million barrels, nearly 8 times expectations suggesting some demand for fuel in the world’s biggest oil consuming nation.

Still, this year, “world oil demand will be down by more than 10 per cent on the year to around 90 million barrels per day (bpd) due to the COVID-19 crisis,” Eurasia Group said in a note.

“This will mark the biggest demand shock in industry history,” it said.

Official data is due out later on Wednesday.

In Libya, the National Oil Company expects oil output to rise to more than a quarter of a million barrels per day (bpd) by next week, it said on Tuesday.

The NOC said it was restarting exports from the Zueitinia oil terminal after checking the security situation at the port and fields that pipe crude there.

An escalation in the country’s conflict led to a blockade of facilities, which is now easing, although analysts say they don’t expect Libya to reach the 1.2 million bpd of production it was pumping previously.

Source:www.energynewsafrica.com