Crude drops amid oversupply warnings and increase in COVID cases
By Ahmad Ghaddar
LONDON, Nov. 17 (Reuters) – Crude prices fell on Wednesday after the International Energy Agency (IEA) and OPEC warned of impending oversupply and COVID-19 cases in Europe increased risks to the recovery in demand, although lower gasoline stocks in the US slowed losses.
* As of 10:57 a.m. GMT, Brent crude futures were down 69 cents, or 0.87%, to $ 81.72 a barrel, while US West Texas Intermediate (WTI) was down of 85 cents, or 104% to $ 79.91 per barrel.
* The IEA warned on Tuesday that “the global oil market remains tight in all respects, but a respite from rising prices may be on the horizon … due to increased supply”.
* The agency said high price levels would push up U.S. oil production in 2022, accounting for about 60% of its 1.9 million barrels per day forecast for supply growth outside of United States. OPEC.
* On Tuesday, OPEC Secretary General Mohammad Barkindo said the group saw signs of a growing oil supply oversupply from next month, adding that its members and allies will need to be “very careful” .
* New waves of COVID-19 cases in Europe, prompting some governments to reimpose restrictions, have also affected prices.
* “So far the impact has been negligible,” said Stephen Brennock of brokerage firm PVM. “That said, there is a risk that the situation will worsen and mobility levels will be seriously compromised in the coming months.”
* A larger-than-expected drop in gasoline inventories in the United States limited some losses. Data from the American Petroleum Institute (API) industry group on Tuesday showed it fell 2.8 million barrels in the week ending Nov. 12, according to market sources.
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