Oil posts second straight weekly plunge as stockpiles soar, demand dwindles

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Oil posts second straight weekly plunge as stockpiles soar, demand dwindles

US and UK futures’ prices were little changed on Friday, but both of the oil futures had been whacked away as much as 6 per cent this week and had reported their second straight weekly percentage decline in a row as crude oil stockpiles are rising all over the globe and gasoline demands appear to have met with an unfathomable scale of struggle to bounce back to a pre-pandemic level.

In point of fact, both US WTI (West Texas Intermediate) and UK crude futures’ prices had shrugged off over 6 per cent this week as beforementioned, as the week had revealed a cascade of dismal data that signalled an abundance in market supply, while a latest move from Saudi and Kuwait to slash the official selling prices of their Arab crude for Asia, had reaffirmed a strident supply glut.

Aside from that, as productions in the US refineries across the Gulf of Mexico had been paused due to the Hurricane Laura, a category 4 Atlantic hurricane which has been the strongest ever to make landfall in the US state of Louisiana, Thursday’s US Energy Information Administration data had unveiled a surprise gain in US crude stockpile.

Demand worries grow in line with rising pandemic cases

Citing statistics, on Friday’s commodity market round off, Brent crude futures’ prices fell by 0.6 per cent to $39.83 per barrel, while US West Texas Intermediate (WTI) crude futures’ prices ended the day almost flatlined at $37.33 a barrel.

In factuality, the weekly percentage decline in crude oil futures’ prices came against a baleful backdrop of a number of inflammatory indicators that suggested a protracted and paradoxical recovery from the pandemic-induced fiscal slump, while addressing to an oversupply fear brewing in the crude oil markets, Commerzbank analysts wrote in a client note, “The financial markets are continuing to set the tone, including on the oil market... fears about an oversupply have added to the general feeling of uncertainty.