Oil prices is falling due to concerns about US economy
Last Updated on August 7, 2020
Oil prices expanded from its decline with opening of US market on Friday, to continue its losses for the second day in a row, away from the highest level in five months, with continued corrections and profit taking, in addition to growing concerns about the recovery of US economy from pandemic of Coronavirus, especially after new stimulus package faltered in United States.
Oil prices fell by 1.4% to $ 41.37, from the opening level at $ 41.96, and recorded the highest level at $ 42.20, and Brent crude fell by 1.3% to the level of $ 44.56 per barrel, from opening level at $ 45.14, and reached highest level at $ 45.28 .
US crude lost 0.5% at yesterday’s settlement, its first loss in last five days, after it recorded the previous day’s highest level in five months at $ 43.50 a barrel, and Brent crude futures fell more than 0.4%, after recording previous day’s level of 46.22. $ Per barrel is the highest since last March.
Concerns about US economy
Contrary to current correction processes, oil prices are being negatively pressed by the growing concerns about the recovery of US economy, largest consumer of fuel in the world, especially in light of the faltering talks between Republicans and Democrats about the new stimulus package in the country.
There is also a high incidence of Coronavirus infection in a number of US states, which casts further doubts about how quickly the fuel demand is recovering.
In terms of trading this week, oil prices are high by an average of 2.5%, after decline in US inventories and production.
US Energy Agency announced on Wednesday that commercial stocks in country decreased by about 7.4 million barrels during the week ending July 31, in the second weekly decrease in a row, exceeding experts’ expectations for a decrease of about 3.4 million barrels.
According to these data, total commercial stocks in United States decreased to about 518.5 million barrels, which is the lowest level since week ending April 10, in a positive sign for the levels of domestic demand in largest oil consumer in the world.
As for US production, it decreased last week by about 100 thousand barrels, bringing the total to 11.0 million barrels per day, and United States currently tops the list of largest oil producers in the world.
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