Picture: REUTERS
Picture: REUTERS

Tokyo — Oil prices fell for the second straight day on Wednesday as doubts re-emerged over demand, with Covid-19 cases continuing to rise worldwide and fuel shortages in some regions.

Brent crude was down $1.03 or 1.3% at $78.06 a barrel by 1.30am GMT, having fallen nearly $2 on Tuesday after touching $80.75, its highest in nearly three years.

US oil fell $1.02 or 1.4% to $74.27 a barrel, having dropped 0.2% in the previous session.

Oil prices have been charging higher as economies recover from pandemic lockdowns and fuel demand picks up, while some producing countries have seen supply disruptions.

Traders expect that oil cartel Opec and allies, usually known as Opec+, will decide to keep supplies tight when they meet next week.

“While the supply backdrop has not changed much, oil prices hitting $80/bbl would see pressure building for Opec+ nations to increase their production quota,” ANZ Research said in a note.

Oil demand is expected to rise strongly in the next few years, Opec forecast on Tuesday, sounding a warning that the world needed to keep investing in production to avert a crunch even as it transitions to less polluting forms of energy.

China’s weakening housing market and growing power outages have hit sentiment as any fallout for the world’s second-biggest economy would likely have a knock-on effect on oil demand, analysts said.

China is the world’s top oil importer and second-biggest consumer of the fossil fuel after the US.

US crude oil, petrol and distillate inventories rose last week, according to market sources, citing American Petroleum Institute figures on Tuesday.

Crude stocks rose 4.1-million barrels for the week ended September 24. Petrol inventories rose 3.6-million barrels and distillate stocks rose 2.5-million barrels, the data showed, according to the sources, who spoke on condition of anonymity. 

Reuters

subscribe

Would you like to comment on this article or view other readers' comments?
Register (it’s quick and free) or sign in now.

Speech Bubbles

Please read our Comment Policy before commenting.