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Oil prices add to losses as supplies swell amid weak demand

Published 09/11/2020, 09:17 AM
Updated 09/11/2020, 09:20 AM
© Reuters.
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LCOC
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TOKYO, Sept 11 (Reuters) - Oil prices extended declines on
Friday, under pressure from a surprise rise in U.S. stockpiles
and ongoing weak demand from the coronavirus pandemic.
Brent crude LCOc was down 8 cents, or 0.2%, at $39.98 a
barrel by 0110 GMT, after falling nearly 2% on Thursday, while
U.S. crude CLc1 was off by 2 cents at $37.28 a barrel, having
fallen 2% in the previous session.
Both major benchmarks were headed for a second week of
declines.
In the United States, stockpiles rose last week against
expectation as refineries slowly returned to operations after
production sites were shut down due to storms in the Gulf of
Mexico and wider region.
"Crude production is starting to return following a couple
of storms, but a weak demand outlook and the start of
maintenance season will keep the pressure on oil prices," said
Edward Moya, senior market analyst at OANDA.
Crude inventories in the United States rose 2.0 million
barrels last week, against expectations for a 1.3 million-barrel
decrease in a Reuters poll. EIA/S ENERGYUSA
In a further bearish sign, traders were starting to book
tankers again to store crude oil and diesel, amid a stalled
economic recovery as the COVID-19 pandemic continues unabated.
Onshore storage remains near capacity as supplies continue
to outpace demand, so the use of so-called floating storage is
back in vogue as cheap financing costs and the spread between
contracts for delivery now and later months makes it favourable
for traders to hold oil for later sale.

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