Oil extends drop near $32 on signs US stockpiles swelled

      Published on Sunday, 31 May , 2020      904 Views     
Oil extends drop near $32 on signs US stockpiles swelled

  • Business

Oil extended its drop to trade below $32 a barrel after a US industry report signalled crude inventories swelled for the first time in three weeks, raising fresh concerns about excess supply.

Futures fell 3.8% in New York, putting the market on track for its first back-to-back daily decline in three weeks.




The American Petroleum Institute reported that stockpiles expanded by 8.73 million barrels last week, according to people familiar with the data.

If confirmed by government figures on Thursday, it would be the biggest increase this year.

Oil’s rally started to falter Wednesday after Moscow signalled that it wanted to scale back supply cuts pledged under the OPEC+ agreement from July, but Russian President Vladimir Putin and Saudi Arabia’s Mohammed bin Salman later reiterated their cooperation to the deal ahead of a June 9-10 meeting.

Oil is still up about 70% this month as supply curbs trim a global glut and pockets of demand emerged after the easing of lockdown restrictions.

The physical market is showing signs of recovery, with refiners across Asia buying distressed cargoes, while the top US infectious disease expert said there is a chance that a coronavirus vaccine will be available by the end of the year.

Reverberate

However, the damage inflicted by the pandemic continues to reverberate across the industry, with Chevron Corp. planning a 10% to 15% reduction in its global workforce this year, the biggest cut to headcount yet among majors.

Relations between Washington and Beijing deteriorated further after the US said it could no longer certify Hong Kong’s autonomy from China.

“Uncertainty is still lingering around OPEC+ cuts going forward, adding bearishness to oil prices,” said Howie Lee, an economist at Oversea Chinese Banking Corp. in Singapore. “Another factor is the US-China tension build-up, and we might see prices remaining volatile in the short-term as a result.”

US gasoline stockpiles rose by 1.12 million barrels last week, while supplies at the storage hub of Cushing, Oklahoma, fell by 3.37 million, the API reported.

The Energy Information Administration is expected to report nationwide crude inventories decreased by 1.9 million barrels, according to a Bloomberg survey.



Russia and Saudi Arabia have agreed to closely coordinate on the OPEC+ deal — a pledge to reduce output by almost 10 million barrels a day. As part of that pact, cuts would slowly taper from July.

Keywords:
Category Business, World News | 2020/05/31 latest update at 4:00 PM
Source : Arabian Business | Photocredit : Google
905 Views
Comments Add comment



Gulf Media

Related Articles

The editorial staff of Saudi Arabia Today would like to give all of its readers from Gulf and Saudi Arabia and the whole world the opportunity to participate actively in the development of the website! If you have something interesting, fun, scandalous - just something worth to be seen from more people. Capture it and share it in the Saudi Arabia Today with a short text.

Do you have information you want to reach our readers?

Send article/s

You can subscribe to our Facebook, Twitter and Google pages or use our RSS feed channel to always read the most important news about Saudi Arabia, the Gulf and the world.


Sponsored Publications