Oil prices fall as U.S. fuel demand remains weak

Oil prices fall as U.S. fuel demand remains weak

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Singapore: Oil prices fell slightly on Friday, after US inventory data showed that the world ’s largest oil consuming country has sluggish fuel demand, while the deterioration of Sino-US tensions has put pressure on global financial markets.

At 0334 GMT, Brent crude oil fell 25 cents or 0.7% to $ 35.04 per barrel, and US West Texas Intermediate crude oil futures fell 53 cents or 1.6% to $ 33.18 per barrel. Nonetheless, both contracts are expected to grow for the fifth consecutive week with the help of production cuts and optimism about the recovery of demand in other countries.

The assembly needs a breath. OCBC economist Howie Lee said that this is already a four-week increase and the market needs to wait for the downstream prices to catch up.

“Except for the short term, the bullish momentum looks fairly complete.”

Data from the Energy Information Administration on Thursday showed that US crude oil and distillate inventories rose sharply last week. Analysts say that although states have removed travel restrictions to curb the coronavirus pandemic, fuel demand remains weak.

Christopher Louney, a capital market analyst at Royal Bank of Canada, said in a report: “The Memorial Day weekend has not attracted American motorists as many market bulls had hoped.”

Looking ahead, traders will focus on OPEC +, the results of negotiations on production cuts between the Organization of Petroleum Exporting Countries (OPEC) and allies including Russia in the second week of June.

Saudi Arabia and some OPEC member countries are considering extending the record-breaking output of 9.7 million barrels per day beyond June, but have not yet received Russian support.

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