Thursday, October 22, 2020

Weaknesses of Demand Prospects Spur Oil Prices Lower

 Black commodity trading continued to be under pressure, extending the decline from the previous session after the increase in US petrol inventory showed declining fuel demand prospects.

Brent crude futures traded lower at $ 41.55 a barrel, while the US WTI traded lower at $ 39.75 a barrel.

Although data released by the Energy Information Administration (EIA) shows a decline in U.S. crude oil inventories, unexpected gasoline supply has increased significantly by 1.9 million barrels last week compared to the expected decline of 1.8 million barrels.

Meanwhile, crude oil inventories reported a decline of 1.001 million barrels, slightly lower than market expectations for a reduction of 1.021 million barrels last week.

Market concerns over the recovery of fuel demand continue to depress black commodity trade following the continuing increase in the number of coronavirus infections around the world, forcing some countries to impose new sanctions, particularly in the UK, France, the Netherlands and Italy.

In addition, hopes for US fiscal stimulus to be agreed before the re-run presidential election also put oil prices lower at today's trading session.