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High oil stocks and weak US stock market lower oil prices

by Bunkerist
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Oil prices fell further on Friday. Oil is on its way to a second-week downturn, after the US stock markets turned upside down and US oil stocks unexpectedly increased.

Brent LCOc1 fell 17 cents, or 0.4%, at $39.89 a barrel by 1348 GMT, and West Texas Intermediate (WTI) crude CLc1 was down 1 cent, or less than 0.1%, to $37.29 a barrel.

Both benchmarks were 6% down for the week.

The three major US stock indices are heading for a second weekly decline as recent economic indicators show a long and difficult recovery due to the pandemic.

At the same time, the expectations that the US Senate of about $ 300 billion will be provided as aid for the new coronavirus, which eases the market atmosphere, have also come to an end. Fears about over-supply also add to the general feeling of uncertainty.

Inventories increased contrary to expectations as production facilities were gradually returning to operations following the closure of production facilities due to storms in the Gulf of Mexico and the wider region. US crude oil stocks increased by 2 million barrels despite to 1.3 million barrels of decrease estimates.

Another downward sign is that while there is a sluggish economic recovery during the period of the COVID-19 outbreak, tanker reservations for crude oil and diesel fuel started to increase.

Increased stocks are likely to be the subject of the Sunday monitoring panel of the Organization of Petroleum Exporting Countries (OPEC) and its allies, including Russia, on 17 September. The group, known as OPEC +, is reducing supply to reduce stocks, but it seems more important for the meeting to focus on harmony among members rather than making deep cuts.

Following Saudi Arabia, Kuwait lowered its official selling price to Asia for October, taking into account the falling demand.

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