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Oil Below $41 With Signs of Swelling U.S. Crude Stockpiles


By Saket Sundria and Alex Longley

(Bloomberg) Oil traded below $41 a barrel as industry data pointed to higher American crude stockpiles before government figures later.

The American Petroleum Institute reported that inventories rose by 2.05 million barrels last week, people with knowledge of the data said ahead of official figures to be published later on Wednesday. Gasoline inventories declined, the API numbers showed, potentially allaying some fears over the health of fuel demand.

All eyes are on official government data after API reports increase

Crude has been steady this week as traders weigh the reintroduction of virus-control measures on the one hand and stimulus by many governments to bolster their economies on the other. Oil market volatility has tumbled and trading volumes have fallen by about a third since the start of this month. Prices have been supported by OPEC+’s record output cuts so far, but those are scheduled to be eased starting next month.

“Investors are currently in wait-and-see mode with regards to increased cases in the U.S.,” said Kevin Solomon, an energy analyst at brokerage StoneX Group Inc. “OPEC+ will continue to follow the pre-announced cuts as demand is currently anemic.”

Prices
  • West Texas Intermediate for August traded up 10 cents at $40.72 a barrel as of 8:38 a.m. New York time
  • Brent for September settlement edged up 0.4% to $43.25
    • Brent’s one-month timespread was 14 cents in contango, trading higher on the day

Coronavirus cases in the U.S. rose 1.8% from a day earlier to 2.96 million, according to data compiled by Johns Hopkins University and Bloomberg News. European officials warned that the impact of the pandemic may be worse than previously estimated and that the recovery may take longer because of a slow easing of restrictions.

Other oil market news:
  • Libya’s National Oil Corp. gave instructions to a tanker to enter Es Sider port and load crude. It expected forces blockading the port to allow its passage.
  • At least 20% of shut-in Canadian production is being restored, just months after the price crash forced producers in Alberta’s oil sands to slash up to 1 million barrels a day of output.
  • Europe’s beleaguered oil refiners are about to get some help from the other side of the world.
  • Abu Dhabi National Oil Co. raised pricing for August sales of its four crude grades after a similar move by Saudi Arabia earlier this week.


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