Oil stable as virus cases, higher crude stocks stall recovery

Covid-19 infection cases cross grim milestone of over 3 million in US

LONDON:

Oil prices were broadly stable for a fourth session on Wednesday, with rising US crude stockpiles and an increase in US coronavirus infections arresting a recent recovery sparked by easing lockdowns.

Brent crude futures rose $0.1 to $43.18 a barrel by 1135 GMT. US West Texas Intermediate (WTI) crude futures were up $0.03 at $40.65 a barrel.

Both benchmarks are set for a fourth session of daily percentage changes of less than 1% in either direction.

The US coronavirus outbreak crossed a grim milestone of over 3 million confirmed cases on Tuesday as more states reported record numbers of new infections.

US crude oil stockpiles rose last week, although gasoline and distillate inventories fell more than expected, data from industry group the American Petroleum Institute (API) showed.

“The lull in price action in the oil market is continuing this morning even as sentiment is sullied by renewed US glut fears,” said PVM analysts in a note. “The search continues for a catalyst to break oil out of its range.”

The US Energy Information Administration (EIA) said on Tuesday that 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. EIA’s crude stock data is due later on Wednesday.

Key ministers in the OPEC+ grouping of oil exporters are due to hold talks next week about the future of their record output cut deal, which is due to taper off from next month.

Abu Dhabi National Oil Co (Adnoc) plans to boost oil exports in August, the first signal that OPEC+ countries are preparing to ease output cuts, three sources familiar with the development said.

Meanwhile, Libya’s National Oil Corporation said a forced shutdown in production since January was expected to result in output dropping to 650,000 bpd in 2022 from about 1.2 million bpd achieved at the start of 2020.