Oil ticks up, but gains capped by demand destruction

Oil ticks up, but gains capped by demand destruction

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Singapore: Oil prices rose slightly on Thursday, although the increase was limited by the unexpected increase in US crude oil reserves that have been hit by the coronavirus pandemic.

The U.S. Energy Information Administration said on Wednesday that the U.S. crude oil and distillate stocks unexpectedly increased in the past week, and fuel demand has fallen because the sharp increase in coronavirus cases has begun to hit U.S. consumption.

At 0207 GMT, the price of Brent crude oil futures rose 2 cents to $44.31 per barrel, or 0.1%; the price of West Texas Intermediate (WTI) crude oil in the United States rose 6 cents to $44.31 per barrel. 41.96 US dollars, an increase of 0.1%. Since the encouraging news about the coronavirus vaccine was hit earlier this week, prices have been at a four-month high.

ANZ said: “Usually a lot of fuel stocks are used, but the increase in the number of COVID-19 cases hinders recovery.” He was referring to the usual demand during the peak summer driving period in the United States.

As of the week of July 17, crude oil inventories increased by 4.9 million barrels to 536.6 million barrels, compared with a decline of 2.1 million barrels expected in a Reuters survey. Production increased to 11.1 million barrels per day, an increase of 100,000 barrels per day.

According to Reuters, the United States reported more than 1,000 deaths from COVID-19 on Tuesday, marking the first time since June 10 that the United States has surpassed this grim milestone, as the total infection rate in California exceeds that of New York.

President Donald Trump said that the epidemic may worsen before the condition improves, which is a change from his previous firm attitude towards reviving the economy.

A new round of disputes between Washington and Beijing put further pressure on prices.

In the case of accusations of espionage, the United States gave China the right to close its consulate in Houston for 72 hours, which marked a sharp deterioration in relations between the world’s two largest economies.

Economic data from Japan, the world’s fourth largest oil consumer, also weighed on prices. Factory activity contracted for the 15th consecutive month in July, indicating that lower economic activity due to the pandemic is continuing into the third quarter.

Consumer confidence data expected in Europe later in the day may guide the oil market.

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