US crude oil stocks are breaking records, and oil prices fell more than 5% on Wednesday, or more than $ 2 per barrel, after coronavirus cases rose in the densely populated areas of the United States.
The U.S. has been experiencing the second-largest increase in infection since the pandemic began. Infections are rising in China, Latin America and India, investors and oil prices are under pressure.
The market indicates that high oil prices are not possible if there cannot be a support against the collapse in demand due to the pandemic.
Brent crude settled at $40.31 a barrel, down $2.32, or 5.4%. On Tuesday, Brent hit its highest price since early March, just before the pandemic and Saudi-Russia price war roiled markets.
West Texas Intermediate (WTI) crude settled at $38.01 a barrel, losing $2.36, or 5.8%.
A strong US dollar, which moves in the opposite direction with oil, and the decline in equities also weighed on prices.
According to the data, US crude oil stocks increased by 1.4 million barrels last week and exceeded expectations for 299,000 barrels. This was a third record for US crude oil stocks.
The International Monetary Fund said that the epidemic caused wider and deeper economic damage than expected, and further reduced the 2020 global output estimates.
India’s oil imports in May reached its lowest level since October 2011.
China, the world’s largest crude oil importer, is also expected to slow down imports in the third quarter following record purchases in recent months.