Oil prices dropped on Wednesday due to the surge in US raw stocks and tensions between the US and China, according to government data.
Brent crude futures settled down 3 cents at $44.29 a barrel, while West Texas Intermediate (WTI) crude settled down 2 cents at $41.90 a barrel.
U.S. crude and distilled petroleum stocks grew unexpectedly as sharply rising coronavirus incidents began to lower demand for petroleum and petroleum products in the United States in general.
According to some data, despite the analysts’ expectations that crude oil stocks would drop by 2.1 million barrels, it rose by 4.9 million barrels in the week of July 17 to 536.6 million barrels. Production increased by 100,000 barrels per day to 11.1 million barrels.
Overall, these data show that demand recovery has stopped.
The president said on Tuesday that the outbreak will worsen before it gets better, and they have no predictions about the re-opening of the economy.
This second experience may be positive for US oil demand expectations and strategies. Instead of an uncontrolled, devastating second crash wave, perhaps with a more controlled attitude it can be overcome with less damage.
However, a new disagreement between Washington and Beijing pressed prices as the U.S. talked about the closure of the Chinese consulate in Houston, while a source implied that China is considering closing the U.S. consulate in Wuhan.
In addition to pressure, there are signs that Iraq, the second largest producer of the Organization of Petroleum Exporting Countries, still has not reached its target in the package agreed by OPEC to cut supplies.