Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Oil Down Over Smaller-Than-Expected Crude Oil Draw, Gasoline Build

Published 10/22/2020, 12:23 PM
Updated 10/22/2020, 12:25 PM
© Reuters.

© Reuters.

By Gina Lee

Investing.com – Oil was down on Thursday morning, continuing losses from the previous session. The U.S. Energy Information Administration (EIA) reported a smaller-than-expected draw in U.S. crude oil supplies, adding to worries of an oversupply as fuel demand continues to weaken.

Brent oil futures were down 0.41% to $41.56 by 12:20 AM ET (4:20 AM GMT). WTI futures fell 0.50% to $39.83, slipping below the $40 mark.

EIA data released on Wednesday showed a 1.001 million-barrel draw for the week to Oct. 16, smaller that the predicted 1.021 million-barrel draw and much smaller than the previous week’s 3.818 million-barrel draw.

Wednesday’s data also showed that a 1.895 million-barrel build in gasoline inventories, against the 1.829 million-barrel draw predicted and the previous week’s 1.626 million-barrel draw.

“The latest EIA report showed an unexpected increase in gasoline inventories, which came at the same time as reduced gasoline output because of refinery outages due to Hurricane Delta. So the implication is gasoline demand is pretty soft,” National Australia Bank (OTC:NABZY) head of commodity research Lachlan Shaw told Reuters.

The American Petroleum Institute reported a surprise 584,000-barrel build in the week to Oct. 16 on Tuesday.

Investors remain concerned about weak fuel demand as the number of COVID-19 cases in Europe and some U.S. states continues to climb. Fears were also exacerbated by China’s decision to restrict outbound travel to curb the spread of the virus.

Diminishing hopes that the U.S. Congress would be able to pass the latest stimulus measures before the Nov. 3 election also contributed to a worsening outlook.

“The resurgence in COVID-19 cases is seeing the U.S. motorist increasingly putting the brakes on. This makes the negotiations on a U.S. stimulus package even more important,” ANZ Research said in a note.

However, NAB’s Shaw warned that even if Congress approved the measures in time, any uplift would likely be temporary.

“It might improve the demand tone for a week or two, but with the COVID-19 spread accelerating there are headwinds there,” he said.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.