Brent Crude Falls, Growing Concerns On Oil GlutBrent crude futures dropped on Wednesday morning trading session on growing concerns of oil glut coupled with the resurgence in COVID-19 cases around the western world, dampened investors optimism.
Brent crude was down about 1.08% to trade at $42.18 a barrel by 9.40 GMT at London’s trading session.
American government data on crude oil inventories will be released later in the day.
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“Some investors took profits after the recent rally as they saw higher U.S. crude stockpiles,” Chiyoki Chen, chief analyst at Sunward Trading said.
China, the world’s largest importer of crude oil is also expected to reduce crude imports in Q3, 2020 after record crude oil purchases, as higher oil prices weaken demand and oil refiners worry about a resurgence of the worst pandemic in human history.
“Still, the market remains concerned about a rising number of coronavirus cases in the United States and elsewhere£, said Kazuhiko Saito, chief analyst at Fujitomi Co.
However crude oil remained above the $40 dollars support levels, at the world’s consumption for oil began to recover in major economies emerging from the lockdown, while a group known as OPEC+ (OPEC members, major oil allies) reduced crude oil output and U.S. shale producers closed it wells.
“We expect Brent to be traded between $35-45 a barrel for the next week as concerns over a second wave of the coronavirus pandemic will limit gains, while reduced supply from OPEC+ will lend support,” Sunward’s Chen said.