Crude Oil Edge Lower After Surge on US Stocks Draw

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The prices of crude oil slightly dropped on Thursday, but still held onto their previous gains after the U.S government released data showing a drop in inventories, supporting the notion that the fuel demand is rising again despite the ravaging COVID-19 pandemic.

crude oil prices

On the other hand, the Brent crude oil dropped $0.8 to trade at $45.35 per by 0150GMT, this was after the 2% gain in the previous trading session. The West Texas Intermediate oil dropped by $0.6 to trade at $42.61 per barrel after it had gained 2.6% back on Wednesday.

The US distillate inventories, gasoline, and Crude Oil dropped last week after demand improved and the refiners increased production as WTI Crude Oil Targets a Retest of $43.00 After Rebound.

The US demand for fuel increased to 19.37 BPD last week, which was the highest level since March as showed by the reported released by the EIA (Energy Information Administration), whereas the crude oil dropped to 10.7 BPD (barrels per day) a decline from 11 barrels per day.

The crude oil inventories dropped by about 4.5 million barrels as compared to analysts’ expectations for a 2.9 billion drop.

On Tuesday, the EIA’s downtrend revision was key to the US oil production prediction for 2020 also supported the prices. The U.S prediction of crude oil dropped by 990,000 BPD in 2020 to about 11.26 million barrels per day, sharper than the previous 600,000 bpd drop it forecasted last month.

Capping the uptrend, OPEC (Organization of the Petroleum Exporting Countries) stated in a monthly report that the demand for oil would decline by about 9.06 Million BPD in 2020, which was more than 8.95 million bpd drop that was expected last month.

The increased uncertainty over the current stalemate in Washington on the aid package to further support the recovery from the diverse effects of COVID-19 pandemic might also weigh heavily on oil prices.

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