Oil prices fell on profit taking Thursday after three days of gains, helped by the Federal Reserve’s sweeping stimulus measures and optimism surrounding a U.S. $2 trillion emergency stimulus plan.
Benchmark Brent crude fell 2.3 percent to $26.75 a barrel, while West Texas Intermediate (WTI) crude futures were down 2.7 percent at $23.84.
Equities resumed their slide today as a historic $2 trillion U.S. fiscal stimulus deal failed to offset worries about a looming recession caused by the coronavirus spread.
As deaths mount in the U.S. and Europe, there are more than 472,000 diagnosed cases of COVID-19 worldwide.
Spain’s coronavirus death toll overtook that of China, prompting lawmakers to extend the state of emergency until April 12.
Italy’s death toll from the virus crossed the 7,500 mark and New York turned out to be the epicenter of the U.S. outbreak with over 30,000 cases, raising concerns about a global recession.
With lockdowns in many countries, investors expect that oil demand will contract by more than 10 million barrels per day.
Production increases by Saudi Arabia and Russia also loomed, causing further uncertainty.
Meanwhile, data released by the Energy Information Administration (EIA) on Wednesday showed crude oil inventories in the U.S. rose by 1.6 million barrels for the week ended March 20, against expectations for a 2.8 million barrels increase.
The data showed gasoline inventories fell by 1.5 million barrels, more than twice the expected drop, while distillate stockpiles were lower by about 680,000 barrels, compared with an expected drop of 1.9 million barrels.
The EIA report also said overall fuel demand fell by nearly 2.1 million barrels per day.
Source: Read Full Article