Oil slips amid Covid-19 surge in India and rising US stockpiles

Tokyo — Oil prices fell on Thursday after a slump in the previous session, as rising US stockpiles added to concerns about a hit to demand from surging coronavirus infections in Asia and possible US rate hikes.

Brent crude was down 6 US cents, or 0.1%, at $66.60 a barrel by 1.41am GMT, having fallen 3% on Wednesday. US oil fell 7c, or 0.1%, to $63.29 a barrel, after a 3.3% drop in the previous session.

“A resurgence in Covid-19 cases across parts of Asia is doing little to support the market in the near term,” ING Economics said in a note.

Almost two-thirds of people tested in India show exposure to the coronavirus, suggesting a spiralling spread of the virus as the daily death toll rose to a record 4,529.

The decline in prices this week was given added impetus on Wednesday after media reports said the US and Iran have made progress in talks over Tehran’s nuclear programme that could result in sanctions being lifted and more supply coming to the market.

Later reports indicated that more time was needed to reach an agreement.

Speculation the Fed might raise rates weighed on the outlook for economic growth and prompted investors to reduce exposure to oil and other commodities.

Rising US stockpiles of crude also weighed on prices, though the gain in the most recent week was below expectations.

Crude inventories increased by 1.3-million barrels last week, against analysts’ expectations in a Reuters poll for a 1.6-million-barrel rise. 

Reuters