Oil prices fall down Today on Wednesday as the oil industry data showed an unexpected increase in inventory build in the United States where coronavirus cases continue to climb, potentially further decreasing demand in oil consumption. The world’s biggest oil consumer US-focused earlier that the condition could get worse due to the coronavirus outbreak.
American Petroleum Institute (API) reported U.S. crude inventories showed a high last week by 7.5 million barrels against the expectations for a draw of 2.1 million.
Brent crude dropped to 32 cents, or 0.7%, to $44 a barrel by 0156 GMT, and U.S. West Texas Intermediate (WTI) crude fell 33 cents, or 0.8%, to $41.59.
Oil prices only increased by about $1 the previous day, which is supposed to be their highest since March 6.
“Crude’s rally hit a brick wall after the API report showed a sharp rise in stockpiles and on President Trump’s warning that the coronavirus pandemic in the U.S. is likely to worsen,” said Edward Moya, senior market analyst at OANDA in New York.
“The crude demand outlook just got a double whammy with what could be the biggest rise in stockpiles since late May if confirmed by the EIA report tomorrow and on Trump’s downbeat virus briefing.”
Japan, the world’s fourth-largest oil consumer, also compared on prices in the oil industry. Factory activity is being compromised for 15 months, showing a downfall in the economic activity because of the coronavirus pandemic still active reaching the third quarter.
Oil prices showed a rise on Tuesday after the positive hope of the COVID-19 vaccine and after European Union leaders agreed on a 750 billion-euro ($859 billion) fund to prop up coronavirus-hit economies.
The effect of those funds to cope with the economy on oil prices is still not adjustable as it may take some more months to start flowing and results may take years to show.
Iraq, the second-largest producer in the Organization of the Petroleum Exporting Countries (OPEC), is showing signs of not meeting its criteria in the supply market.
Southern Iraqi exports in the first 20 days of July averaged 2.70 million BPD, according to data from industry sources, equal to official data for exports in all of June.