© Reuters. FILE PHOTO: The sun sets behind a crude oil pump jack on a drilling pad in the Permian Basin in Loving County
By Yuka Obayashi
TOKYO (Reuters) – Oil prices fell for a third day on Thursday as a surprise surge in inventory levels and a resurgence in COVID-19 cases in India and Japan raised concerns that global economic recovery and fuel demand could slow.
Futures fell 57 cents, or 0.9%, to $ 64.75 a barrel by 0157 GMT after falling $ 1.25 on Wednesday. US West Texas Intermediate (WTI) crude oil futures fell 58 cents, or 1.0%, to $ 60.77 a barrel after losing $ 1.32 on Wednesday.
Both contracts fell more than 2% on Wednesday, closing at their lowest level since April 13th. They have fallen more than 3% so far this week.
US crude oil inventories rose unexpectedly in the week ending April 16, the Energy Information Administration said on Wednesday, confirming data from the American Petroleum Institute the previous day.
“Oil prices have been under pressure this week amid growing fears that rising numbers of COVID-19 cases in India and Japan could slow the recovery in fuel demand in Asia,” said Toshitaka Tazawa, an analyst at commodity broker Fujitomi Co.
“Market sentiment was further hurt by weekly MSRP data showing US crude oil spikes.”
India, the world’s third largest consumer of oil, reported another record increase in its daily death toll from COVID-19 on Wednesday. Japan, the world’s leading oil importer, is considering a state of emergency for Tokyo and Osaka as the number of new cases rises, broadcaster NHK reported.
The Russian-led petroleum exporting countries and allies organization, a producer group known as OPEC +, is facing a largely technical meeting next week at which significant policy changes are unlikely, the Russian deputy prime minister and OPEC + sources said.
“Earlier this week, the market rose momentarily on news of Libya’s force majeure in exports, but concerns about the spread of the pandemic in Asia now outweigh the news in Libya,” said Tazawa of Fujitomi.
Libyan National Oil Corp (NOC) on Monday declared force majeure on exports from Hariga port, saying it could expand the measure to other facilities due to a budget dispute with the country’s central bank.
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