The United States oil prices has fallen after data showed that United States crude stockpiles unexpectedly rose last week, bringing up concern about a sluggish recovery in fuel demand as coronavirus cases continue to surge in many countries.
Brent crude dropped by 17 cents, or 0.42% to $40.62 a barrel, after rising 2.5% on Wednesday.
ANZ analyst in a note stated that the oil market is under pressure on the prospect of both subdued demand and rising supply.
“Refinery maintenance season and a cautious approach from refiners should keep crude oil demand soft,” the bank said.
ANZ also said China’s imports are likely to level off as teapot, or independent refineries, reach their maximum annual crude import quotas.
With coronavirus cases rising in several U.S. states, the country’s crude stockpiles rose by 3 million barrels in the week to Sept. 4, data from the American Petroleum Institute showed on Wednesday. That compared with analysts’ forecasts of a draw of 1.4 million barrels.
“If the EIA confirms a crude oil build later today, it would be the first U.S. stock build since mid-July,” ING analysts said.
The EIA already cut its 2020 world oil demand growth forecast by 210,000 barrels per day to 8.32 million bpd.
The rising stockpiles come ahead of a meeting on September 17, 2020 of the market monitoring panel of the Organization of the Petroleum Exporting Countries and allies including Russia, together known as OPEC+, which in August trimmed supply curbs from earlier this year on expectations demand would improve.
“This issue will be front and centre … next week, where we expect a strong statement that if markets continue to weaken, the producer group will be prepared to trim output further,” Citi analysts said in a note.