OIL prices eased in early trade today as industry data showing a build in US crude stockpiles and a forecast for US crude output to fall less than anticipated in 2020 added to worries about oversupply.
Brent crude LCOc1 futures fell 13 cents, or 0.3%, to US$42.95 (RM183.59) a barrel by 0019 GMT (8.19am Malaysian time). US West Texas Intermediate (WTI) crude CLc1 futures dropped 10 cents, or 0.3%, to US$40.52 a barrel.
Prices were little changed in the previous session and have been held in a narrow band over the past two weeks as concerns about a spike in coronavirus cases globally tempers optimism about a recovery in fuel demand.
US crude oil stockpiles rose last week, against expectations for a draw, although gasoline and distillate inventories fell more than expected, data from industry group the American Petroleum Institute showed today.
The US Energy Information Administration’s (EIA) said today US crude oil production is expected to fall by 600,000 barrels per day (bpd) in 2020, a smaller decline than the 670,000 bpd it forecast previously.
However, it also expected global oil demand would recover through the end of 2021, predicting demand of 101.1 million bpd by the fourth quarter of next year.
“The EIA’s forecast of a lower decline in US output was partially offset by its outlook for firm demand recovery, which limited losses in oil markets,” Hiroyuki Kikukawa, general manager of research at Nissan Securities said.
“Still, expectations that the Organisation of the Petroleum Exporting Countries (Opec) and allies would taper oil output cuts from August and softer US equities added to pressure,” he said.
Abu Dhabi National Oil Co plans to boost oil exports in August, the first signal that Opec and its allies, together known as Opec+, are preparing to ease record oil output cuts next month, three sources familiar with the development told Reuters.
Key ministers of the Opec+ are due to hold talks next week.
Meanwhile, the number of confirmed coronavirus cases in the United States pushed past three million today, according to a Reuters tally. – July 8, 2020, Reuters
