Oil inches lower as bleaker demand outlook weighs

Cornelia Mascio
Settembre 16, 2020

As of press time Tuesday afternoon, PREMIUM TIMES' check showed that the barrel of West Texas Intermediate (WTI) was trading at $37.86, gaining 1.61 per cent Tuesday.

Oil prices rose more than two per cent on Tuesday, supported by hurricane supply disruptions in the United States, but demand concerns loomed as energy industry forecasters predicted a slower-than-expected recovery from the pandemic.

Oil prices rose on Wednesday, extending gains from the previous session, as a hurricane disrupted USA offshore oil and gas production and an industry report showed a big drop in US crude stockpiles.

The outlook for oil demand remained weak, capping price gains.

The API reported that crude inventories fell by 9.5 million barrels in the week to September 11 to about 494.6 million barrels, compared with analysts' expectations for a build of 1.3 million barrels.

The International Energy Agency (IEA) on Tuesday trimmed its 2020 outlook by 200,000 barrels per day (bpd) to 91.7 million bpd, citing caution about the pace of economic recovery.

OPEC and its allies are expected to hold an online monitoring meeting on Thursday, to assess whether the huge output cuts being implemented are still sufficient to stave off an oil glut, as the resurgence of coronavirus is hitting the global economy hard.

The IEA's demand revision aligns with forecasts from major oil industry producers and traders.

With Hurricane Sally expected to make landfall on the U.S. Gulf Coast, more than a quarter of U.S. offshore oil and gas production was shut and key exporting ports were closed as the storm's trajectory shifted east toward western Alabama, sparing some Gulf Coast refineries from high winds. OPEC downgraded its oil demand forecast and BP said demand might have peaked in 2019.

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