Oil falls 2% as rise in U.S. crude stocks fans oversupply fears

TOKYO (Reuters) – Oil prices slid about 2 percent on Wednesday, giving up most of the previous day’s gains, as a surge in U.S. crude stocks and growing coronavirus infections in the United States and Europe fanned fears of a supply glut and weaker fuel demand.

Brent crude futures were down 74 cents, or 1.8%, at $40.46 a barrel by 0644 GMT, having climbed nearly 2% the previous day. U.S. oil was down 90 cents, or 2.3%, at $38.67, after gaining 2.6% on Tuesday.

U.S. crude oil and gasoline stocks rose last week, data from industry group the American Petroleum Institute showed, with crude inventories rising by 4.6 million barrels to about 495.2 million barrels, well above analysts’ expectations in a Reuters poll for a build of 1.2 million barrels.

“The higher-than-expected build in U.S. crude stocks prompted fresh selling, while concerns over supply disruption from Hurricane Zeta have receded,” said Hiroyuki Kikukawa, general manager of research at Nissan Securities.

Energy firms and ports along the U.S. Gulf Coast prepared on Tuesday for Zeta, the 11th hurricane of the season, as it entered the Gulf of Mexico.

Rising COVID-19 cases with the lack of a U.S. coronavirus fiscal relief package also dented investors’ risk appetite,” Kikukawa said. He expected the gloomy sentiment to keep prices under pressure through the Nov. 3 U.S. presidential election.http://Oil falls 2% as rise in U.S. crude stocks fans oversupply fears. Read More

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