Oil prices fell last week, as coronavirus cases surged and raised the prospect of a second wave of the COVID-19 outbreak hitting demand in the world’s top consumer of crude and fuel.
Brent was down $1.34, (3.5%), at $37.21 a barrel, having dropped nearly 8% in the previous session. West Texas Intermediate was down $1.37 cents, (3.8%), at $34.97 a barrel, after slumping more than 8% on earlier in the week.
The oil benchmarks are heading for their first weekly declines in seven, with Brent and US crude both down more than around 12% as rising stockpiles also drag on prices.
Greg Priddy, Director for global energy and the Middle East at Stratfor, said: “US inventories are up this week, against many analysts expectations (while) COVID-19 cases are also showing signs of a second wave in the U.S. and elsewhere.”
He added: “It is now clear that the deepest OPEC+ cuts, 9.7 million bpd, will end at the end of July, ratcheting down to 7.7 million bpd.”
US crude and gasoline stockpiles grew further last week, according to government data. US crude oil inventories rose to a record 538.1 million barrels, as cheap imports from Saudi Arabia flowed into the country.
But Texas and Arizona are seeing their coronavirus infections jump and are struggling to cope with a growing number of patients filling hospital beds.
In Houston, Lina Hidalgo, senior official for the county that includes the city at the heart of the U.S. oil industry, said “we may be approaching the precipice of a disaster”.
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