Oil Falling as Demand Fears Increase Due to The Indian Crisis And Increase in US Inventories

Oil prices fell on Wednesday, April 28, in light of the rapid spread of Covid-19 cases in India and an increase that exceeded expectations for crude stocks in the United States, which overshadowed the confidence shown by OPEC and its allies in the strong recovery of global demand for fuel.

Brent crude futures fell three cents, equivalent to 0.05%, to $66.39 a barrel, after an increase of 1.2% on Tuesday.

US West Texas Intermediate crude futures fell 5 cents, or 0.08%, to $62.89 a barrel, after rising 1.7% yesterday.

The very rapid spread of Covid-19 cases in India, the third largest consumer of oil in the world, and Japan and Brazil casts doubts on a recovery in demand in the near term and dampens market sentiment.

Meanwhile, two sources told Reuters that the American Petroleum Institute monitored an increase in crude oil inventories to 4.319 million barrels last week, which far exceeds the increase indicated by analysts’ estimates in a Reuters poll.

Weekly inventory data from the US Energy Information Administration, which is being monitored by the market, is scheduled for release at 14:30 GMT today.

OPEC, Russia and their allies are set to stick with plans to gradually ease oil production curbs from May to July, amid optimistic expectations of a recovery in global demand.

This will return 2.1 million barrels per day to the market from May to July, reducing the amount of cuts to 5.8 million barrels per day.