Decline in Oil Prices Despite a Significant Decrease in US Crude Inventories

Oil prices retreated after they rose earlier Thursday, May 6, under pressure from increased cases of Covid-19 in India and elsewhere, despite a drop that greatly exceeded expectations for US crude stockpiles.

Brent crude futures fell 28 cents, equivalent to 0.4%, to $ 68.68 a barrel, and US West Texas Intermediate crude futures lost 31 cents, equivalent to 0.5%, to $65.32 a barrel.

The two benchmarks recorded their highest levels since mid-March on Wednesday before retreating to close the session unchanged after two days of gains.

Hopes that the second deadly wave of the Coronavirus in India will approach its climax today, Thursday, were dashed, with record daily numbers of infections and deaths recorded and as the virus spread from cities to villages in the second most populous country in the world.

The US Energy Information Administration said on Wednesday that US inventories of crude oil fell by far more than expectations last week, with the rise in refinery production and a jump in exports.

Crude inventories fell 8 million barrels in the week ending April 30 to 485.1 million barrels, compared with analysts polled by Reuters forecasts for a drop of 2.3 million barrels.