WTI Crude Oil Weakens as Crude Inventories in the US Rise
WTI crude oil is trading somewhat bearish, weakening early on Wednesday over fresh worries about the second wave of coronavirus cases across the world even as US crude inventories rose unexpectedly over the previous week. At the time of writing, WTI crude oil is trading at around $26.03 per barrel.
Gains in crude oil prices over optimism about additional supply cuts by Saudi Arabia vanished and the sentiment among traders was once again dictated by latest developments surrounding the pandemic. Earlier this week, Saudi Arabia confirmed that it would implement an extra 1 million bpd cut in crude production starting in June to offset the falling demand for oil globally.
New cases are being increasingly reported from China and South Korea, causing anxiety in markets for a possible resurgence of the pandemic even as economies look to ease lockdown measures and reopen. If the pandemic reemerges, the demand for oil will once again be impacted adversely, which could weaken crude oil prices further.
Crude oil is also trading weaker following the release of the API report during the previous session which revealed a surprising build in US crude stockpiles. According to the API, crude inventories in the US rose by 7.6 million barrels to 526.2 million barrels over the past week, a higher climb than the 4.1 million barrel build forecast by economists.
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