Oil Prices Slip as Inventory Builds Spark Fears of Glut - InvestingChannel

Oil Prices Slip as Inventory Builds Spark Fears of Glut

Petroleum prices eased on Wednesday after a surprise build-up in U.S. crude stockpiles stoked concerns about a global supply glut and a spike in global COVID-19 cases fueled fears of a stalled oil demand recovery.

Brent crude futures for December delivery were at $42.49 U.S. a barrel, down 69 cents, or 1.6%, while December U.S. West Texas Intermediate crude futures slipped 78 cents, or 1.87%, to $40.92 U.S. Both benchmarks rose in the previous session.

Figures released by the American Petroleum Institute (API) showed crude inventories rose by 584,000 barrels in the week to Oct. 16 to 490.6 million barrels, compared with analysts’ expectations in an economist poll for a draw of one million barrels.

Adding to pressure, worldwide COVID-19 cases crossed 40 million on Tuesday, with some parts of Europe imposing renewed lockdown measures.

On the supply side, Russia’s energy minister said on Tuesday it was too early to discuss the future of global oil production curbs beyond December, less than a week after saying plans to scale back existing output restrictions should proceed.

Earlier this year the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia – together known as OPEC+ – agreed to trim production cuts in January from a current 7.7 million barrels per day (bpd) to roughly 5.7 million bpd.