Oil Prices Inch Upward on Inventory Report

Darnell Taylor
September 27, 2020

U.S. West Texas Intermediate (WTI) crude CLc1 futures gained 17 cents, or 0.4%, to $40.1 per barrel.

U.S. crude oil inventories decreased by 1.6 million barrels during the week ending September 18, the U.S. Energy Information Administration (EIA) said in a report on Wednesday.

Brent crude LCOc1 futures rose 8 cents, or 0.2%, to $41.85 a barrel by 1408 GMT.

Brent crude oil prices dropped on Thursday, September 24, as United States oil stocks reduced less than market hopes at a time when the U.S. Federal Reserve cautioned of a deferred economic recovery and soft oil demand. Both benchmarks are also heading for a monthly decline, which would be the first for Brent in six months.

U.S. gasoline stocks fell by 4 million barrels in the week to 227.5 million barrels, the EIA said, compared with analysts' expectations in a Reuters poll for a 648,000-barrel drop.?

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US fuel demand remains in the doldrums as the pandemic constrains travel. The four-week average of gasoline demand was 8.5 million barrels per day (bpd) last week, the government data showed, down 9% from a year earlier.

"The current economic and oil backdrop is anything but encouraging and this capped the attempted rally", Tamas Varga of oil brokerage PVM said. Crude oil is traded in dollars, a rising exchange rate does that oil more expensive for investors from other currency areas.

Oil prices were little changed on Friday but on track for a weekly fall on concerns that a global resurgence of COVID-19 infections will constrain fuel demand, while the likely return of exports from Libya will add to supply.

Prices turned down after data showed U.S. business activity slowed in September, U.S. Federal Reserve officials flagged concerns about a stalling recovery, and Britain and Germany imposed restrictions to stem new coronavirus infections - all factors affecting the fuel demand outlook.

In Libya, an oil tanker was loading a cargo on Thursday from one of three Libyan terminals that were reopened in recent days and more cargoes are expected to be lifted in the coming days.

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