Oil prices slip as U.S. inventories, virus fears grow

Oil prices fell on Wednesday as industry data showed a bigger-than-expected inventory build in the United States, where climbing coronavirus cases may further dent fuel demand in the world’s biggest oil consumer. Brent crude fell 35 cents, or 0.8%, to $43.97 a barrel by 0541 GMT, and U.S. West Texas Intermediate (WTI) crude dropped 39 cents, or 0.9%, to $41.53.

Oil prices climbed about $1 the previous day, reaching their highest since March 6. The U.S. Energy Information Administration will release official oil data later on Wednesday. The United States reported more than 1,000 deaths from COVID-19 on Tuesday, according to a Reuters tally, marking the first time since June 10 the nation has surpassed that grim milestone.

Economic data from Japan, the world’s fourth-largest oil consumer, also weighed on prices. Factory activity contracted for a 15th straight month in July, indicating lower economic activity because the pandemic is extending into the third quarter.

Oil prices rose on Tuesday on optimism for a COVID-19 vaccine and after European Union lenders agreed on a 750 billion euro ($859 billion) fund to prop up coronavirus-hit economies.

There are also signs that Iraq, the second-largest producer in the Organization of the Petroleum Exporting Countries (OPEC), is still not meeting its target under an OPEC-led supply cut deal.

Russia, meanwhile, plans to cut its oil loadings from Baltic ports and Black Sea’s Novorossiisk in Aug. 1-10 by nearly a quarter compared with July 1-10, according to a preliminary loading schedule and Reuters calculations, which could support prices.

Oil prices slip as U.S. inventories, virus fears grow, Reuters, Jul 22