Oil Falls After a Sudden Increase in US Stocks

Oil prices fell by more than 1% on Wednesday, September 23, after data reported that US crude inventories rose unexpectedly, renewing concerns about fuel demand, which caused heavy selling earlier in the week.

By 0641 GMT, Brent crude futures fell 33 cents, or 0.8%, to $ 41.39 a barrel. US West Texas Intermediate crude futures fell 40 cents, or 1%, to $ 39.40, after falling 1.4% to $ 36.26.

The two benchmarks fell more than 4% on Monday, the biggest decline in two weeks, but they rose on Tuesday.

Concerns about fuel demand were renewed with the increase in cases of Coronavirus in countries including France and Spain, along with the possibility of further restrictions in Britain, at a time when more supplies may enter the market from Libya.

In the United States, where deaths due to disease exceeded 200,000, the highest in the world, crude oil inventories rose by 691,000 barrels in the week ending September 18, according to sector data, compared with analysts’ expectations of a 2.3 million barrel drop.

Gasoline stocks fell by 7.7 million barrels, nearly eight times expected, indicating some demand for fuel in the world’s largest oil-consuming country, but the jump in Covid-19 cases in many countries raises question marks about the extent of global demand recovery.

In Libya, the National Oil Corporation said on Tuesday that it expects oil production to rise to more than 250,000 barrels per day by next week.