Crude oil futures hit a new low in more than a week under the pressure of surge of confirmed cases unexpected increase of inventory

On April 22nd, the market betting India's rising COVID-19 confirmed cases would damage energy demand, while unexpected growth in inventory data also brought pressure to the market. Crude oil futures closed lower, hitting a new low for more than a week.

West Texas Intermediate crude for June delivery on the New York Mercantile Exchange fell $1.32, 2.1%, to $61.35 a barrel. On the ice European futures market, Brent crude oil, the global benchmark, fell $1.25, 1.9%, to $65.32 a barrel in June. Dow Jones market data showed that the two benchmark indexes both hit the lowest level of contract settlement in recent months since April 13.

Taylor Ricci, CO editor of Sevens Report Research, said: "there are many changes in the energy market, including the growing concern about COVID-19 cases in the world, which has hindered the recovery of consumer demand." He said that the recent series of strong economic data, especially in the United States, are favorable for prices. However, the antitrust litigation against OPEC is a pessimistic trend, because OPEC's oil production restriction policy "has largely supported the rebound of oil prices since last autumn".

The U.S. House Judiciary Committee has passed a bill called nopec, which will make OPEC face antitrust litigation for reducing production. This is part of a long-term effort to make OPEC's manipulation of oil prices illegal. However, the bill still has a long way to go before it can be signed into law.

"If we see a deterioration in the global coronavirus situation, the 'nopec' campaign is supported in Congress OPEC + improves its production prospects," Richey said. Us benchmark crude oil futures prices are likely to see support above $50, as oil prices need a rest in 2021. Otherwise, the hope of sustained recovery of demand stable output will support the consolidation trend, the possibility of eventually rising will become greater greater. "

Richey said that all the factors that affect oil prices "currently have contradictory effects on the market, which is why oil prices are properly in consolidation mode." He said the price of West Texas Intermediate was tied between a peak close to $66-67 a barrel in 2021 a low of $57 a barrel in March. They are likely to continue to adjust laterally within this range until one more of these basic factors are clearly understood. "

U.S. crude oil inventories rose by 600000 barrels in the week ending April 16, according to the U.S. energy information administration. In the three weeks before that, oil supply fell. Analysts in proctor's energy information survey on average forecast that crude oil inventories will decrease by 4.4 million barrels, while the American Petroleum Association reported on Tuesday that crude oil inventories will increase by 436000 barrels.

EIA data also show crude oil stocks in Cushing, Oklahoma. The U.S. oil reserve center cut 1.3 million barrels this week, but total domestic oil production remained unchanged at 11 million barrels a day. The EIA data showed that gasoline supply increased by 100000 barrels this week distillate stocks decreased by 1.1 million barrels. S & P's global Proctor energy information survey predicts that gasoline supply will increase by 800000 barrels, but distillate stocks are expected to decrease by 1.3 million barrels.

For oil, the outlook for demand remains a major concern, with traders continuing to focus on progress in negotiations aimed at a nuclear deal with Iran. India again reported a record number of cases on Wednesday, exceeding 200000 for the seventh day in a row. It is reported that hospitals in the country are rapidly overcrowding with patients, beds in the intensive care unit of the medical system have run out, there is less less oxygen. News reports say Japanese officials are considering ordering a state of emergency in Tokyo Osaka due to the surge in cases.

Also on Wednesday, the Wall Street Journal quoted people familiar with the matter as saying that President Biden's government has indicated that it is willing to relax sanctions on part of Iran's economy as negotiations on the agreement continue.

On the New York Mercantile Exchange, gasoline fell 1.7% to $1.98 a gallon in May, heating oil fell 1.78% to $1.85 a gallon in May. Both closed at their lowest level since April 13. In May, natural gas prices fell 1.3% to $2.69/mmbtu.

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Source: International Petroleum Network