Fundamental Comment

Oil prices add to losses on corona fears, rise in inventories

Oil prices add to losses on corona fears, rise in inventories

Oil prices extended their losses for a third straight session on Thursday amidst persisting anxiety of a second wave of coronavirus infections and after a rise in U.S. crude stocks.

U.S. Crude oil futures shed more than 1 percent to $37.60 a barrel, following hefty losses of 4.95 percent yesterday after a more than forecast increase in U.S. crude stockpiles last week.

Brent crude dipped 1.7 percent to $39.62 a barrel, the lowest level in nine days, resuming its ease from a high of $43.93 recorded on Tuesday, which was the highest since early March.

Still, the key focus among investors is on the latest surge in Covid-19 infections in the United States that prompted some states to impose 14-day quarantine on travelers from California, Florida and Texas.

While the U.S. has recently managed to flatten the Covid-19 new cases curve, currently there is another spike with the report of dire new levels in southern and western states.

Meanwhile, the pandemic has hit 9,542,451 around the globe, with a deaths toll of 485,280, where it is expected to pass 10 million by the end of the week.

The rapid resurgence is raising qualms over future fuel demand prospects, as the key concern at the meantime is witnessing a second wave of corona infections.

On the supply side, the Energy Information Administration (EIA) reported a build of 1.4 million barrels in US crude inventories in the week ended June 19 to a total of 540.7 million barrels, suggesting that demand for crude was weaker than expected. Analysts had estimated a rise of 1.2 million barrels.

Worries of a new trade were added more agony to the sentiment after the US charted plans to levy tariffs on $3.1 billion of European products.

The Euro STOXX 600 slumped 0.74 percent to 354.54, the lowest since mid-June, trailing sharp losses among Asian equities that dropped from four-month highs.

The US dollar index rose slightly to 97.26, ahead of U.S. final GDP, durable goods and weekly unemployment claims data due later int eh day.

Share Article