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Oil prices slip as growing stockpiles signal bumpy fuel demand recovery

Published 09/10/2020, 09:07 AM
Updated 09/10/2020, 09:10 AM
© Reuters.
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By Sonali Paul
MELBOURNE, Sept 10 (Reuters) - Oil futures fell in early
trade on Thursday, paring overnight gains, on worries about fuel
demand after data showed U.S. crude stockpiles rose last week,
rather than dropping as expected, and COVID-19 cases continued
to rise around the world.
U.S. West Texas Intermediate (WTI) crude CLc1 futures fell
20 cents, or 0.5%, to $37.85 a barrel at 0056 GMT, after
climbing 3.5% on Wednesday.
Brent crude LCOc1 futures dropped 14 cents, or 0.3% to
$40.65 a barrel, after rising 2.5% on Wednesday.
As coronavirus case surged 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. The U.S. Energy Information Administration will release
official weekly inventory data later on Thursday, a day later
than normal following the U.S. Labor Day holiday.
In a further bearish sign, leading commodity traders are
booking tankers to store crude oil and diesel on the water, with
supply outpacing consumption, according to trading sources and
shipping data. The rising stockpiles come ahead of a meeting on Sept. 17 of
the market monitoring panel of the Organization of the Petroleum
Exporting Countries (OPEC) 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.


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