SULAIMANI (ESTA) — Oil prices extended losses on Thursday as a surprise build-up in U.S. crude inventories and a resurgence of coronavirus cases in India and Japan fueled fears that a recovery in global economy and fuel demand may be stalled.
Brent crude futures fell 45 cents to $64.87 per barrel at 0623, following a drop of $1.25 on Wednesday.
U.S. West Texas Intermediate (WTI) crude futures were down 42 cents at $60.93 a barrel, after losing $1.32 the previous day.
The Energy Information Administration said U.S. crude oil stockpiles unexpectedly edged higher in the week ended on April 16, with the inventories rising by 594,000 barrels, according to Reuters.
“An unexpected and high increase in the U.S. inventories fueled concerns over weak demand which came against expectations for a strong recovery in demand,” Satoru Yoshida, a commodity analyst with Rakuten Securities, told Reuters.
“What is hurting the market sentiment is also the fact that the COVID-19 pandemic is spreading again at a fast pace in India and Japan despite the fact there had been hopes that the spread of vaccination would improve the infection situation,” he said.
India, the world’s third-largest oil user, reported on Thursday 314,835 new cases of the coronavirus over the previous 24 hours, the highest daily increase recorded anywhere.
Japan, the world’s No.4 oil importer, is expected to issue a third state of emergency of Tokyo and three western prefectures that could last for about two weeks, Reuters reported.