Oil prices calmed on Wednesday after four days of slumping as investors were wary of expectations for stronger fuel demand as transportation constrained by rising COVID-19 cases around the world.
Fluctuating around Tuesday’s close in Asian morning trade, Brent crude rose 23 cents, or 0.3%, to $69.26 a barrel as of 0512 GMT. West Texas Intermediate (WTI) oil rose 24 cents, or 0.4%, to $66.83 a barrel.
In the short term, demand facing headwinds in Europe and India has put crude oil prices in a tough fight. It is likely that the oil market will remain volatile with frequent pullbacks.
India, the world’s third-largest importer of crude oil, implements a new policy to commercialize federal storage by creating leased space, also starting with the sale of oil from the Strategic Petroleum Reserve (SPR) to state refineries.
The strong dollar is hitting all commodities, especially metals as fragile as oil and gold. Crude oil is typically priced in US dollars, so a stronger dollar affects demand by making oil more expensive.
In the United States, more supply will come to market if official forecasts come true. U.S. shale oil production is expected to rise to 8.1 million barrels per day (bpd) in September, according to the Energy Information Administration’s (EIA) monthly drilling output report.
Crude oil and gasoline stocks in the United States are expected to decline last week, while distillate stocks are expected to rise for the third week in a row, according to surveys. Crude oil inventories fell by about 1.1 million barrels in the week to August 13.