Offshore oil stands are seen on April 20, 2020 in Huntington Beach, California. Oil prices traded in negative territory for the first time as the spread of coronavirus (COVID-19) collisions demand.
Michael Heiman | Getty Images
Oil prices fell in early trade on Thursday on worries about unhurried demand growth with coronavirus cases rising, U.S. crude stockpiles hitting an all-time high and the U.S. Federal Register projecting recovery from the pandemic would take years.
U.S. West Texas Intermediate (WTI) crude futures eradicated gains from Wednesday, falling as low as $38.42 a barrel. The benchmark contract was down 2.2%, or 86 cents, at $38.74 at 0031 GMT.
Brent raw futures fell 2.0%, or 85 cents, to $40.88 a barrel, also giving up gains from Wednesday.
Analysts said grasp a doubling in prices since April, traders were selling into any negative news. “The recent rally in unrefined oil prices stalled as rising inventories showed the path to a recovery will be a rocky one,” ANZ analysts said in a note.
U.S. inconsiderate inventories rose unexpectedly by 5.7 million barrels in the week to June 5 to 538.1 million barrels — a record — as moments were boosted by the arrival of supplies bought by refiners when Saudi Arabia flooded the market in March and April, information from the Energy Information Administration showed.
At the same time, gasoline stockpiles grew more than look for to 258.7 million barrels. Distillate stockpiles, which include diesel and heating oil, rose by 1.6 million barrels, but the prolong was smaller than in previous weeks.
Adding to the negative sentiment, the U.S. Federal Reserve said the world’s largest compactness would shrink 6.5% this year and the unemployment rate would be at 9.3% at the end of 2020 in its first projections of the pandemic era.
“Short-term and firm money traders are very much inclined to sell outright or to take profits on any hint of bearish data,” contemplated Stephen Innes, chief global market strategist at Axicorp.
In a further sign that recovery will keep up to be overshadowed by the coronavirus, total U.S. cases topped 2 million on Wednesday, with new infections rising slightly after five weeks of declines, according to a Reuters examination.