Oil prices were under pressure on Wednesday as evidence of rising cases throughout the globe raises questions about efforts to restart economies that have been stalled to curtail the spread of the COVID-19 pandemic.
On top of that, the American Petroleum Institute reported late Tuesday that U.S. crude supplies rose by 1.7 million barrels for the week ended June 19, sparking some worries about oversupply compared against demand for crude.
The API data, which also showed Cushing, Okla., storage hub, meanwhile, saw a fall of 325,000 barrels for the week, comes ahead of a more closely followed report from the Energy Information Administration, which will be released Wednesday at 10:30 a.m. Eastern Time. The EIA data are expected to show crude inventories declined by 100,000 barrels last week, according to analysts polled by S&P Global Platts.
Meanwhile, the World Health Organization pointed to rising cases of coronavirus in the U.S., China, Latin America, reigniting worries of a possible second wave of the epidemic.
“If the pandemic triggers a second round of lockdowns, storage will struggle to accommodate the unused oil and the gasoline uptick that we currently see will be scrapped if new travel restrictions are put in place,” wrote Paola Rodriguez Masiu, senior oil markets analyst at Rystad Energy, in a Wednesday report.
West Texas Intermediate crude for August
fell 86 cents, or 2.2%, at $39.51a barrel on the New York Mercantile Exchange after falling 0.9%.
Global benchmark Brent oil for August delivery
was shedding 72 cents, or 1.7%, at $42.01 a barrel on ICE Futures Europe, following a 1% fall on Tuesday.