You are here: Home » International » News » Markets
Business Standard

Oil prices add to losses as supplies swell amid weak demand due to pandemic

Oil prices extended declines on Friday, under pressure from a surprise rise in US stockpiles and ongoing weak demand from the coronavirus pandemic

Topics
Oil Prices | Coronavirus

Reuters  |  TOKYO 

oil, MF, commodity, fund, crude
Representative image

TOKYO (Reuters) - extended declines on Friday, under pressure from a surprise rise in U.S. stockpiles and ongoing weak demand from the pandemic.

Brent crude was down 8 cents, or 0.2%, at $39.98 a barrel by 0110 GMT, after falling nearly 2% on Thursday, while U.S. crude was off by 2 cents at $37.28 a barrel, having fallen 2% in the previous session.

Both major benchmarks were headed for a second week of declines.

In the United States, stockpiles rose last week against expectation as refineries slowly returned to operations after production sites were shut down due to storms in the Gulf of Mexico and wider region.

"Crude production is starting to return following a couple of storms, but a weak demand outlook and the start of maintenance season will keep the pressure on oil prices," said Edward Moya, senior market analyst at OANDA.

Crude inventories in the United States rose 2.0 million barrels last week, against expectations for a 1.3 million-barrel decrease in a Reuters poll.

In a further bearish sign, traders were starting to book tankers again to store crude oil and diesel, amid a stalled economic recovery as the COVID-19 pandemic continues unabated.

Onshore storage remains near capacity as supplies continue to outpace demand, so the use of so-called floating storage is back in vogue as cheap financing costs and the spread between contracts for delivery now and later months makes it favourable for traders to hold oil for later sale.

 

(Reporting by Aaron Sheldrick; editing by Richard Pullin)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Fri, September 11 2020. 07:39 IST
RECOMMENDED FOR YOU
.