News: Oil’s decline continues as inventories rise, demand recovery clouded.
TOKYO (Reuters) – Oil prices fell around 1% for the fifth straight year on Thursday after official data showed further spikes in U.S. crude oil and fuel inventories as the ubiquitous pandemic clouded prospects for a recovery in demand.
Brent crude fell 74 cents, or 1.1%, to $ 67.26 a barrel by 0745 GMT after falling 0.6% on Wednesday. US oil also fell 65 cents, or 1%, to $ 63.95 a barrel after falling 0.3% in the previous session. Both contracts are down around 3% in the last five days of the decline.
Government data on Wednesday showed that US crude oil inventories rose for four straight weeks after refineries in the south had to shut down due to extreme cold. An industry report that estimated a decline had raised hopes that the profit margin may have stopped.
US crude oil inventories rose 2.4 million barrels last week, the US Energy Information Administration (EIA) said on Wednesday. That was a day after the American Petroleum Institute (API) forecast a 1 million barrels decline on Tuesday.
Gasoline and diesel inventories rose contrary to analysts’ expectations for a decline.
“US MSRP inventory numbers were more bearish than the previous day’s API numbers,” ING Economics said, noting that inventory levels exceeded 500 million barrels for the first time this year.
“Refineries continue to bring back capacity after the freezing conditions in February,” ING said, adding that throughput rates before the cold snap are still below average.
On the demand side, a slowdown in some vaccination programs and the prospect of further restrictions on the fight against the coronavirus have mitigated expectations for a recovery in fuel consumption.
A number of European countries have stopped using AstraZeneca’s COVID-19 vaccine due to concerns about possible side effects.
Coronavirus cases are also on the rise in Germany, while Italy is planning a national lockdown for the Easter lockdown and France will put in place stricter restrictions.
Reporting by Aaron Sheldrick; Adaptation by Michael Perry and Lincoln Feast.
Original Source © Reuters