The oil price fell as reports show growing stockpiles. Worries on supply outpacing demand for goods surrounded the market.
The European benchmark Brent crude edged lower by 0.71%, now trading at $41.42 per barrel.
Similarly, US benchmark West Texas Intermediate now fell below the $40 threshold after slashing 34 cents. Per barrel price currently stands at $39.46.
So far in the week, both benchmarks fell by a significant 4% in total brought by substantial changes.
Among the industry’s biggest pullers include growing cases in the Europe’s biggest economies, particularly in Spain and France. As if adding an insult to the injury, Libya decided to enter the crude oil limbo once more as it restarts production.
In January, the country issued a blockade in oil production. Such event did not surprise many as the OPEC member seem to record recurring patterns in the past due to internal conflict.
The African country expects oil commodity output to rise to more than a quarter of a million barrels as early as next week now that production has started.
Although industry experts say that they do not expect the country to reach the level of production as before, standing at 1.2 million barrels per day.
In the United States, crude oil stock rose by 691,000 barrels. This is a sharp build-up from analyst expectation of 2.3 million draw.
Adding a jovial tone to the gloomy mood, gasoline stocks fell by 7.7 million, translating to roughly eight times more than forecasted reports.
EIA Report: US Crude Oil Exports On Sustained Low
Along with the growing stockpiles, the US Energy Information Administration’s Petroleum Supply Monthly Report supports the foregoing claims.
The United States’ crude oil exports follows a downward trend after its record-high in February, which stood at 3.7 million barrels per day. In June, the country’s overseas oil outflows hitched lower at 2.753 million barrels.
China had been the primary importer US crude above neighboring country Canada. With its better-than-expected economic rebound from the coronavirus pandemic, the state increased imports to sustain operations.
The world’s largest consumer market received 361,000 bpd of the commodity in the first half of the year. Beneath the hoarding is Beijing taking advantage of the low price offering in the market during the oil price frenzy in April.
It has grown stockpiles in the arsenal for future reference, especially advantageous at times when oil price soars again.
Nevertheless, the EIA Report also stated that the country’s exports in the first half of the year still stands higher than last year’s figures.
During such a period, global oil demand fell to an average of 90 million barrels per day. This is a significant drop from the records of the same period last year at 100.7 million bpd.
The declining global demand for crude oil resulted in lower imports and exports of the commodity.
Similarly, black gold exports to Canada were down by 19%, averaging only around 389 barrels per day. However, supplies bound for other key markets, namely the United Kingdom and the Netherlands increased by 11% and 15%, respectively.