Oil was down Thursday morning in Asia as the ever-rising number of COVID-19 cases in India and Japan continue to raise fuel demand concerns.
The market was also rattled by Wednesday’s U.S. crude oil supply data from the U.S. Energy Information Administration that showed a surprise build of 594,000 barrels for the week ending Apr. 16. Forecasts prepared by Investing.com had predicted a 2.975-million-barrel draw, while a 5.889-million-barrel draw was reported during the previous week.
Supply data from the American Petroleum Institute the day before showed a build of 436,000 barrels.
On the COVID-19 front, India, the world’s third-largest oil importer, reported another record number of COVID-19 cases on Wednesday. Japan, a place behind India on the importer scale, is also considering imposing a state of emergency in Tokyo and Osaka due to rising COVID-19 cases.
“Oil prices have been under pressure this week due to growing worries that surging number of COVID-19 cases in India and Japan will slow a recovery in fuel demand in Asia… the market sentiment was further battered by the EIA’s weekly data that showed an increase in U.S. crude oil,” Toshitaka Tazawa, an analyst at commodities broker Fujitomi Co., told Reuters.
Elsewhere, the Organization of the Petroleum Exporting Countries and allies (OPEC+) will meet in the following week but is not likely to make major changes to the current production cuts, according to Russian Deputy Prime Minister Alexander Novak.
Meanwhile, Libya’s National Oil Corp. could extend Monday’s force majeure on exports from Hariga port to other facilities.
“Earlier this week, the market rose briefly on news of Libya’s force majeure on exports but concerns over the spread of COVID-19 in Asia are outweighing Libya’s news now,” Fujitomi’s Tazawa said.