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Crude oil prices down $2 as US crude inventories swell, pandemic resurgence feared

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NEW YORK: Oil prices fell $2 a barrel on Wednesday, as traders fearful about report excessive crude inventories and feared {that a} second wave of the coronavirus pandemic might stall the reopening of worldwide economies and lower gasoline demand.

Brent crude was down $2.04, or 4.eight per cent, to $40.59 a barrel by 11:03 a.m. EDT (1503 GMT), a day after hitting its highest since prices began plunging in March. US West Texas Intermediate (WTI) crude fell $2.04, or 5.1 per cent, to $38.33 a barrel.

US crude oil inventories swelled final week by 1.Four million barrels, far exceeding analysts’ expectations in a Reuters ballot for a 299,000-barrel rise, the Power Data Administration mentioned, citing rising manufacturing.

US gasoline shares fell by 1.7 million barrels to 255 million barrels, the EIA mentioned.

“Due to the rise in manufacturing and the rise in crude provides, we’re going unfavorable,” mentioned Phil Flynn, senior analyst at Worth Futures Group in Chicago. “However if you wish to search for the silver lining within the report then it is undoubtedly gasoline demand is coming again.”

Mounting coronavirus circumstances in the USA, China, Latin America and India have unnerved traders and pressured oil prices.

“These are all essential oil demand facilities. A second wave of infections and lockdowns will derail the worldwide financial restoration and with it, oil demand and prices,” mentioned Stephen Brennock of dealer PVM.

Upbeat European manufacturing surveys provided some help, however European Central Financial institution chief economist Philip Lane cautioned that the euro zone economic system nonetheless wanted a very long time to recuperate.

India’s oil imports in Might hit the bottom since October 2011 as refiners with brimming crude inventories lower purchases.

China, the world’s prime crude importer, can also be anticipated to sluggish crude imports within the third quarter, after report purchases in latest months.

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