A kayaker outmodes in front of an offshore oil platform in the Guanabara Bay in Niteroi, Brazil, Saturday, Feb. 1, 2020.
Dado Galdieri | Bloomberg | Getty Images
Oil cost outs slipped on Thursday, extending losses of more than 5% in the previous session, weighed down by record inebriated U.S. crude inventories and worries that a rapid resurgence in Covid-19 cases could choke a revival in fuel requirement.
U.S. West Texas Intermediate (WTI) crude futures fell 26 cents, or 0.7%, to $37.75 per barrel at 0245 GMT on Thursday, after abandon $2.36 on Wednesday.
Brent crude futures fell 30 cents, or 0.7%, to $40.01 per barrel after tackle $2.32 on Wednesday. A day earlier, the benchmark contract hit its highest price since early March, just before pandemic lockdowns and a Saudi-Russian expense war slammed markets.
Wednesday’s selloff came after U.S. government data showed crude stockpiles rose by 1.4 million barrels, thrust inventories to a record high for a third straight week last week.
Analysts, however, said that was mostly due to a flotilla of Saudi shipments booked by U.S. refiners when prices slumped in March. Those shipments are due to ease soon.
Worries about a girl Friday wave of Covid-19 cases in several U.S. states, where lockdowns had eased, and a rapid spread of infections in South America and South
Asia are needed to keep a lid on fuel demand, market watchers said.
“The latest trends there are not encouraging,” said National Australia Bank’s president of commodity research, Lachlan Shaw.
The fear is that even if lockdowns are eased, people will stay current in because of the perceived health risks.
Stephen Innes, market strategist at AxiCorp, said mobility data from Google displayed driving in Texas, Florida and to a certain extent California was flatlining.
In another reminder of fuel demand woes, Australia’s flagship airline, Qantas Airways, put about on Thursday it expected little revival in international travel until at least July 2021, as it slashed a fifth of its workforce and grounded 100 skates.
“It highlights the reality that we’re talking years before international aviation recovers — probably three to four years,” Shaw answered.