Will the oil price forecast fall after Brent crude dips below $40?

Daniel Fowler
September 11, 2020

Accordingly, Brent on Thursday fell 25 cents to $40.54 per barrel, and West Texas Intermediate fell 75 cents to settle at $37.30 per barrel.

As a outcome, United States oil inventories increased by two million barrels last week, compared with the 1.3 million barrel decrease that was expected, according to a Reuters poll.

Crude oil futures for September delivery slipped Rs 24, or 0.87 percent, to Rs 2,741 per barrel at 15:18 hours IST on a business turnover of 4,253 lots.

Oil prices extended declines on Friday, under pressure from a surprise rise in USA stockpiles and ongoing weak demand from the coronavirus pandemic.

Both benchmarks are on course to record their second consecutive week of declines amid a myriad of challenges that have plunged oil markets into turmoil, with bearish traders beginning to book tankers to store crude and diesel as signs point to a slow global economic recovery.

In China, Bank ANZ said oil imports were likely to level off as independent refineries reach their maximum quotas.

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The official EIA data was not as gloomy as an earlier report from the American Petroleum Institute (API), which expected that U.S. crude supplies rose by about 3 million barrels during the past week.

"If the EIA confirms a crude oil build later today, it would be the first US stock build since mid-July", ING analysts said.

"Despite the recent slide in oil prices, we think that the OPEC+ leadership will continue to direct its efforts towards securing better compliance rather than pushing for deeper cuts at this stage", RBC analysts said. Analysts had expected a draw of 1.3 million barrels.

Increasing stockpiles are likely to be a subject at a meeting on September 17 of the market monitoring panel of the Organisation of the Petroleum Exporting Countries (Opec) and allies including Russian Federation.

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