Baghdad Chamber of Commerce – Follow up
Oil prices fell on Wednesday due to concerns about a possible second wave of coronavirus infections in countries that ease public isolation measures, which could lead to renewed movement restrictions, while data showed that US crude stocks are still rising.
Fears overshadowed another call by Saudi Arabia to increase production cuts to balance the market in the wake of declining demand due to the virus, after the largest oil producer in the Organization of Petroleum Exporting Countries (OPEC) said earlier this week that it intended to reinforce production cuts again.
Brent crude fell 40 cents, or 1.3 percent, to $ 29.58 per barrel at 06:58 GMT, after rising 1.2 percent on Tuesday.
US West Texas Intermediate crude futures fell ten cents, or 0.4 percent, to $ 25.68 per barrel, after rising 6.8 percent in the previous session.
“Oil prices are undermining fears that the re-emergence of the Corona virus may urge countries to keep public isolation measures in place for a longer period, which would affect the global economic activity and energy demand,” said Avtar Sandu, commodities director at Philip Futures in Singapore.
On the supply side, the Saudi Press Agency reported on Wednesday that the Council of Ministers urged OPEC + countries to reduce oil production rates further to contribute to restoring the desired balance of global crude markets.
Two well-informed sources told Reuters on Wednesday that the Kuwait Petroleum Corporation will issue less oil in June by requiring customers to reduce five percent of the volume of their shipments in line with the so-called operational permitting clause in their contracts.
In the United States, the American Petroleum Institute said on Tuesday that crude oil stocks rises 7.6 million barrels last week to 526.2 million barrels, compared with analysts’ expectations for an increase of 4.1 million barrels.
But the institute said that crude inventories in Cushing, Oklahoma, the center of delivery, fell 2.3 million barrels, which would be the first decline since February, if confirmed by official data, according to ING Economics.
Official inventory data from the US Energy Information Administration is scheduled for release later Wednesday.