Yesterday, oil prices fell more than 2% as a market surplus forecast by the International Energy Agency (IEA) and expresses worries about the outbreak of a virus in China outweighed concern over disruptions to Libya’s crude output.
Brent crude ended the session down $1.38, or 2.1%, at $63.21 while West Texas Intermediate fell $1.64, or 2.8%, to settle at $56.74.
Prices extended losses in post-settlement trade, with WTI dropping by more than $2, after data from the American Petroleum Institute showed U.S crude inventories rose 1.6 million barrels last week, compared with analysts’ expectations for 1 million-barrel draw.
U.S gasoline stocks built for an 11th week, rising 4.5 million barrels, the API announced, much more than forecasts for a 3.1 million-barrel gain.
“Oil prices remain heavy on oversupply concerns and after the Saudi Energy Minister Price Abdulaziz did not offer any hints of optimism that the OPEC+ production cuts would be extended beyond March,” clarified Edward Moya, senior market analyst at OANDA in New York.
“Demand concerns over a potential epidemic will counter concerns around supply disruptions in Libya, Iran and Iraq, driving spot price volatility in coming weeks,” Goldman said, though the “impact on oil fundamentals remains limited so far”.
“The Libyan pipeline blockade continued to have a muted impact on sentiment …There is a consensus that the disruption will prove short-lived,” claimed Stephen Brennock, oil analyst at PVM