Oil falls as growing coronavirus cases stoke fuel demand worries

CNBC

Reuters
KEY POINTS
  • Brent crude futures were down 37 cents, or 0.9%, at $42.77 a barrel as of 0042 GMT.
  • U.S. West Texas Intermediate (WTI) crude futures fell 34 cents, or 0.8%, to $40.31 a barrel.
  • Both benchmarks rose more than 2% on Thursday, buoyed by stronger-than-expect ed U.S. jobs data and a fall in U.S. crude inventories. For the week, Brent is up 4.3% and WTI is up 4.7%.
South Belridge Oil Field is the fourth-largest oil field in California and one of the most productive in the U.S.
South Belridge Oil Field is the fourth-largest oil field in California and one of the most productive in the U.S.
David McNew | Getty Images

Crude prices fell on Friday as the resurgence of the coronavirus globally and in the United States, the world’s largest oil consumer, dimmed the prospects of fuel demand recovery.

Brent crude futures were down 37 cents, or 0.9%, at $42.77 a barrel as of 0042 GMT, and U.S. West Texas Intermediate (WTI) crude futures fell 34 cents, or 0.8%, to $40.31 a barrel.

Both benchmarks rose more than 2% on Thursday, buoyed by stronger-than-expect ed U.S. jobs data and a fall in U.S. crude inventories. For the week, Brent is up 4.3% and WTI is up 4.7%.

Increases in the daily cases of the coronavirus, however, globally and in the United States pressured prices. New U.S. COVID-19 cases rose by more than 50,000 on Thursday, setting a record for a third consecutive day, according to a Reuters tally.

“The market has become increasingly confident that easing restrictions on travel and business would boost demand for crude oil, but the pandemic’s progress threatens to derail this recovery,” ANZ Research said in a note.

“The recovery in gasoline demand will plateau until the U.S. economy improves,” it said.

Gasoline demand will be closely watched as the United States heads into its July 4 holiday weekend as many Americans are expected to hit the road.

U.S. gasoline stocks rose by 1.2 million barrels in the week to June 26, according to data from the Energy Information Administration released on Wednesday.

Oil rises after sharp drop in U.S. crude inventories

CNBC

Reuters
KEY POINTS
  • Brent crude rose 33 cents, or 0.8%, to $41.60 a barrel by 0044 GMT after declining more than 1% on Tuesday.
  • U.S. crude was up 42 cents, or 1.1%, at $39.69 a barrel, having dropped by 1.1% in the previous session.
An aerial view of oil tankers anchored near the ports of Long Beach and Los Angeles amid the coronavirus pandemic on April 28, 2020 off the coast of Long Beach, California.
An aerial view of oil tankers anchored near the ports of Long Beach and Los Angeles amid the coronavirus pandemic on April 28, 2020 off the coast of Long Beach, California.
Mario Tama | Getty Images

Oil prices rose on Wednesday after an industry report showed crude inventories in the United States fell much more than expected, suggesting demand is improving even as the coronavirus outbreak spreads around the world.

Brent crude rose 33 cents, or 0.8%, to $41.60 a barrel by 0044 GMT after declining more than 1% on Tuesday. U.S. crude was up 42 cents, or 1.1%, at $39.69 a barrel, having dropped by 1.1% in the previous session.

U.S. crude and gasoline stocks declined more than expected last week, while distillate inventories rose, data released by the American Petroleum Institute (API) late on Tuesday showed. [API/S]

Crude inventories dropped by 8.2 million barrels to 537 million barrels, against analysts’ forecasts for a draw of 710,000 barrels.

“If the API estimates are vetted by the official government agency data due out tomorrow, this will be viewed as a definite bullish signal,” said Stephen Innes, chief global markets strategist at AxiCorp.

“The reports could go a long way to easing some of those lingering inventory concerns,” he said.

Inventory data from the U.S. government’s Energy Information Administration is due out later on Wednesday.

Still prices are likely to be capped, analysts said, as the world is awash with oil after the coronavirus caused demand for fuel to drop by around a third.

A Reuters poll of analysts indicated that oil prices will consolidate at around $40 a barrel this year, with a recovery potentially picking up in the fourth quarter.

The virus continues to spread around the world with ever increasing rates of infection. Cases now total more than 10 million with more than half a million people dying after catching COVID-19.

Oil prices slides as U.S. crude stockpile growth heightens oversupply fears

CNBC

Reuters
KEY POINTS
  • Brent crude was down 29 cents, or 0.7%, at $42.34 a barrel by 0335 GMT.
  • U.S. West Texas Intermediate (WTI) crude futures fell 35 cents, or 0.9%, to $40.02 a barrel.
Oil pumping jacks, also known as "nodding donkeys", operate in an oilfield near Almetyevsk, Tatarstan, Russia, on Wednesday, March 11, 2020.
Oil pumping jacks, also known as “nodding donkeys”, operate in an oilfield near Almetyevsk, Tatarstan, Russia, on Wednesday, March 11, 2020.
Andrey Rudakov | Bloomberg via Getty Images

Oil futures dropped on Wednesday, extending losses from the previous day, after U.S. crude stockpiles grew more than expected, adding to worries about oversupply.

Brent crude was down 29 cents, or 0.7%, at $42.34 a barrel by 0335 GMT, while U.S. West Texas Intermediate (WTI) crude futures fell 35 cents, or 0.9%, to $40.02 a barrel.

U.S. crude inventories rose by a much bigger than expected 1.7 million barrels last week, according to industry group the American Petroleum Institute (API), well ahead of analysts’ expectations for a 300,000-barrel build.

However, U.S. gasoline and distillate inventories fell, the data showed, feeding optimism that fuel consumption is picking up as some economies ease lockdowns imposed to contain the coronavirus pandemic.

U.S. government data will be released on Wednesday.

“Some investors took profits after the recent rally as they saw higher U.S. crude stockpiles,” Chiyoki Chen, chief analyst at Sunward Trading said.

On Tuesday, both Brent and WTI contracts traded at their highest levels since prices collapsed in early March.

Global oil consumption has started to recover as economies emerge from lockdown, while the Organization of the Petroleum Exporting Countries (OPEC) and allied producers — a grouping known as OPEC+ — have slashed output and U.S. shale producers have shut in wells.

Still, the market remains concerned about a rising number of coronavirus cases in the United States and elsewhere, said Kazuhiko Saito, chief analyst at Fujitomi Co.

New cases of Covid-19 rose 25% in the United States in the week ended June 21 and the death toll in Latin America passed 100,000 on Tuesday, according to a Reuters analysis and tally.

China, the world’s top crude importer, is also expected to slow crude imports in the third quarter, after record purchases in recent months, as higher oil prices hurt demand and refiners worry about a second virus outbreak.

“We expect Brent to be traded between $35-45 a barrel for the next week as concerns over a second wave of the coronavirus pandemic will limit gains, while reduced supply from OPEC+ will lend support,” Sunward’s Chen said.

Oil rises as coronavirus curbs ease, setting stage for demand boost

CNBC

Reuters
KEY POINTS
  • Brent crude was up by 42 cents, or 1.4%, at $29.88 a barrel by 0447 GMT, having fallen nearly 1% on Thursday.
  • U.S. oil gained 45 cents, or 1.9%, to $24.00 a barrel, after a decline of nearly 2% in the previous session.
Oil-storage tanks are seen from above in Carson, California, April 25, 2020 after the price for crude plunged into negative territory for the first time in history on April 20.
Oil-storage tanks are seen from above in Carson, California, April 25, 2020 after the price for crude plunged into negative territory for the first time in history on April 20.
Robyn Beck | AFP | Getty Images

Oil prices gained on Friday as more countries began relaxing restrictions put in place to halt the coronavirus pandemic, raising hopes that demand for crude and its products will start to pick up.

Brent crude was up by 42 cents, or 1.4%, at $29.88 a barrel by 0447 GMT, having fallen nearly 1% on Thursday.

U.S. oil gained 45 cents, or 1.9%, to $24.00 a barrel, after a decline of nearly 2% in the previous session.

Both contracts are heading for a second week of gains after the lows of April, when U.S. oil crashed below zero, with Brent up around 13% and WTI about 21% higher.

However, crude is still being pumped into storage, raising the prospect that any gains prompted by stronger demand will be capped.

“Oil is rallying on expectations of better demand. There are green shoots there but I think the market will need to see those broaden and extend to sustain the rally,” said Lachlan Shaw, head of commodities research at National Australia Bank in Melbourne.

On the supply side, North American oil companies are cutting production quicker than OPEC officials and industry analysts expected and are on track to withdraw about 1.7 million barrels per day of output by the end of June.

“The supply cuts we have seen announced, particularly in North America, are also giving the market confidence,” Shaw said.

Still, U.S. crude inventories at the Cushing storage hub in Oklahoma increased by around 407,000 barrels in the week through May 5, traders said on Thursday, citing Genscape data.

Australia on Friday became the latest country to plan an easing of lockdown restrictions as infections from the virus slow to a trickle, aiming to relax social distancing restrictions in a three-stage process.

France, parts of the United States and countries such as Pakistan are also planning to ease the restrictions instituted to stop the spread of the world’s worst health crisis in a century.

In the U.S., the biggest consumer of oil and its products, motorists are starting to take to the roads as the lockdowns ease. Gasoline supplied to the U.S. market rose to almost 6.7 million barrels per day (bpd) last week, according to estimates from the U.S. Energy Information Administration.

Oil prices jump as US crude inventories reportedly rise by less than expected

KEY POINTS
  • West Texas Intermediate for June delivery surged 14.1% to $14.08 per barrel. International benchmark Brent crude futures also added 4.15% to $21.31 per barrel.
  • The moves came after data from the American Petroleum Institute showed that U.S. crude inventories jumped by 10 million barrels in the week to April 24  —  to 510 million barrels, according to Reuters. That was lower than analysts’ expectations of a build of 10.6 million barrels, Reuters reported.
  • Oil prices swayed wildly on Tuesday between gains and losses as investors continue to keep an eye on depleting crude storage space amid a dearth in demand.
GP: Coronavirus Oil tankers woman in mask Long Beach CA
A woman wearing face mask walks on the ocean front while Oil tankers are seen anchored off the coast of Long Beach, California, after sunset on April 25, 2020.
Apu Gomes | AFP | Getty Images

Oil prices jumped in the afternoon of Asian trading hours on Wednesday following a report that showed a smaller than expected crude inventory build stateside.

West Texas Intermediate for June delivery surged 14.1% to $14.08 per barrel. International benchmark Brent crude futures also added 4.15% to $21.31 per barrel.

The moves came after data from the American Petroleum Institute showed Tuesday that U.S. crude inventories jumped by 10 million barrels in the week to April 24  — to 510 million barrels, according to Reuters. That was lower than analysts’ expectations of a build of 10.6 million barrels, Reuters reported.

Still, in a note dated April 28, Moody’s Investors Service said it was reducing its near-term oil price assumptions for WTI as well as Brent.

“Exceptionally weak short-term prices will persist until production drops enough to ease the strain on storage facilities already operating at or close to full capacity,” said Elena Nadtotchi, vice president and senior credit officer at Moody’s. “Significant supply adjustments in due course should help to balance the market later in 2020, but the pace of the market’s rebalancing and rising oil prices will depend on demand recovery.”

Moody’s price prediction for WTI is currently $30 per barrel this year, and $40 next year. For Brent, it sees prices averaging $35 per barrel in 2020 and $45 in 2021.

Oil prices swayed wildly on Tuesday between gains and losses as investors continue to keep an eye on depleting crude storage space amid a dearth in demand. The coronavirus pandemic, which has forced countries around the world to shut down their economies temporarily as people are told to stay home, has also effectively frozen major economies globally.

WTI for June delivery fell 4 cents, or 3.4%, to settle at $12.34 per barrel on Tuesday. International benchmark Brent crude, on the other hand, gained 47 cents, or 2.35%, to settle at $20.46.

— CNBC’s Pippa Stevens and Sam Meredith contributed to this report.