Oil Prices Fall Over 3% On Oversupply Fears
Oil prices tumbled on Wednesday after industry data showed a rise in U.S. crude oil and gasoline stocks last week, adding to worries about oversupply. Renewed lockdowns in Europe also fanned fresh worries about global fuel demand.
Benchmark Brent crude fell 3.2 percent to $40.30 a barrel, after having climbed almost 2 percent in the previous session.
U.S. crude futures were down as much as 3.9 percent at $38.02 after a 2.6 percent rally on Tuesday, lifted by reports about evacuation of over 150 offshore facilities along the U.S. Gulf Coast due to Hurricane Zeta.
The American Petroleum Institute reported late Tuesday that U.S. crude inventories rose by 4.6 million barrels to about 495.2 million barrels for the week ended October 23 – coming well above analyst expectations of a 1.2 million barrel build. The official EIA numbers will be out later today.
Meanwhile, surging Covid-19 cases in the U.S. and Europe raised fears of weak fuel demand.
The United States is logging more coronavirus infections than ever before, with 29 states reporting record numbers of infections over the past week.
The situation in Europe is “serious and alarming” and the bloc must be more efficient with testing, contact tracing, vaccine and quarantine policies, the EU Council President, Charles Michel, told Italian daily La Stampa in an interview published today.