Oil down 6% on record US crude inventories, virus resurgence

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NEW YORK: Oil prices fell 6% on Wednesday after U.S. crude storage hit another record and coronavirus cases rebound in countries like Germany and surge in heavily populated areas of the United States.
Mounting coronavirus cases in the United States, which had its second-largest rise in new infections since the crisis began, China, Latin America and India have unnerved investors and pressured oil prices. “These are all important oil demand centers. A second wave of infections and lockdowns will derail the global economic recovery and with it, oil demand and prices,” said Stephen Brennock of broker PVM.
Brent crude was down $2.52, or 5.9%, to $40.11 a barrel by 12:33 p.m. (1633 GMT) a day after hitting its highest levels since early March, just before the pandemic and Saudi-Russia price war hit the markets. U.S. West Texas Intermediate (WTI) crude fell $2.56, or 6.3%, to $37.81 a barrel.
US crude oil inventories swelled last week by 1.4 million barrels, exceeding analysts’ expectations in a Reuters poll for a 299,000-barrel rise, the Energy Information Administration said, citing rising production. That marked the third straight record for crude in US storage.
“The thing I was most concerned about was the rebound in domestic production and it was up – as a standalone it was capable of doing some damage to the market,” said Bob Yawger, Director of energy futures at Mizuho. The IMF said the coronavirus is causing wider and deeper damage to economic activity than first thought.–Agencies​