Rabu, 06 Mei 2020

Oil prices dip as supply concerns resurface on rising U.S. stocks - Reuters

SINGAPORE/MELBOURNE (Reuters) - Oil prices were mixed on Wednesday as a higher than expected rise in U.S. inventories refocused investors on the risk of oversupply despite hopes for a recovery in demand as some countries ease coronavirus lockdowns.

FILE PHOTO: Crude oil storage tanks are seen in an aerial photograph at the Cushing oil hub in Cushing, Oklahoma, U.S. April 21, 2020. REUTERS/Drone Base

U.S. West Texas Intermediate (WTI) crude CLc1 futures dipped 26 cents, or 1.06%, to $24.30 a barrel by 0723 GMT, snapping a five-day winning streak.

WTI slipped after a report showed U.S. crude inventories rose 8.4 million barrels last week, more than expected, according to data from the American Petroleum Institute (API) late on Tuesday.

Brent crude LCOc1 futures were up 1 cents, or 0.03%, to $30.98 a barrel.

Brent prices climbed 13.9% in the previous session, part of a six-day rise. Investors may be hesitant to increase their purchases of Brent as the contract has climbed too far over the past streak.

Brent’s relative strength index, a technical measure used to track the future’s trading momentum, was at 72.69 on Wednesday, indicating it is overbought after the recent gains.

Prices recently gained as some countries ended lockdowns aimed at halting the coronavirus spread and as producers axed supply after the demand crunch. But analysts cautioned the rebalancing of the market would be choppy.

“We’re talking about normalisation of supply and demand but we’ve got a long way to go,” said Lachlan Shaw, National Australia Bank’s head of commodity strategy.

However, there are some positive demand signs. Rush hour traffic in Beijing and Shenzhen appears heavier than before the coronavirus hit, based on data from satellite navigation device firm TomTom, AxiCorp Chief Global Market Strategist Stephen Innes said.

“One could extrapolate similar tendencies to occur throughout the world as people shun the mass transit system in favour of private transportation, which should be excellent for gasoline demand,” he said in a note.

Still, oil refiners remain cautious, especially for jet fuel demand. South Korea’s SK Innovation (096770.KS), owner of top refiner SK Energy, said on Wednesday it expected second-quarter refining margins to come under pressure because of a slump in fuel demand and a glut of refined products due to the pandemic.

Gasoline stocks in the U.S., the world’s biggest producer and consumer of oil, fell by 2.2 million barrels, API reported, compared with analysts’ expectations in a Reuters poll for a 43,000 barrel increase, and refinery crude runs rose.

Traders will be looking for further confirmation of the inventory data when the Energy Information Administration comes out later on Wednesday.

Reporting by Shu Zhang in Singapore and Sonali Paul in Melbourne; Editing by Christian Schmollinger

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2020-05-06 07:47:23Z
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