Oil losses deepen as US stock rises and pandemic fears

Oil prices extended their losses on a third day on Thursday, to the surprise of US crude oil stocks and a resurgence of COVID-19 cases in India and Japan raised fears that demand recovery could be blocked.

Over time, crude brent fell 37 cents, or 0.57%, to $ 64.95 a barrel at 0904 GMT, after falling $ 1.25 on Wednesday. West Texas Intermediate (WTI) crude futures fell 35 cents, or 0.57%, to $ 61 after losing $ 1.32 the day before.

Both contracts had ended at their lowest level since April 13 and fell by about 3% this week.

US crude oil stocks rose unexpectedly in the week to April 16, the Energy Information Administration said on Wednesday, with stocks rising 594,000 barrels. Analysts had expected a drop of 3 million barrels, a Reuters poll showed. ,

“An unexpected and high rise in US stocks has fueled concerns about weak demand,” said Rakuten Securities analyst Satoru Yoshida.

“What is affecting market sentiment is also the fact that the COVID-19 pandemic is spreading rapidly again in India and Japan, despite the hope that vaccinations will improve the infection situation.”

India, the world’s third-largest oil consumer, reported 314,835 new cases of coronavirus in 24 hours on Thursday, the highest daily increase recorded anywhere. Japan, the world’s No. 4 oil importer, is expected to issue a third state of emergency over Tokyo and three Western prefectures that could last about two weeks, according to media reports. Read more

The Organization of the Petroleum Exporting Countries (OPEC) and its Russian-led allies, a group known as OPEC +, will hold a major technical meeting next week at which major policy changes are unlikely, Russian Deputy Prime Minister and OPEC sources said. +. Read more

Adding to the bearish sentiment is the progress of negotiations between Iran and world powers to revive the 2015 nuclear deal, said PVM oil analyst Tamas Varga. Iranian oil exports could rise and grow with excess gross supply if an agreement is reached. Read more

“It’s the same old story, a brighter oil balance for the second half of the year competes with the current gloomy reality,” Varga said.

“Right now, the latter is winning, but it’s only a matter of time before that trend reverses.”

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