(Bloomberg) — Oil retreated back below $39 a barrel after an industry report pointed to a bigger-than-expected increase in stockpiles, offsetting supply disruptions from Tropical Storm Zeta.
The American Petroleum Institute reported crude inventories expanded by 4.58 million barrels last week, while gasoline stockpiles rose for a second straight week, according to people familiar. Government figures are due Wednesday. Oil rallied on Tuesday after almost half of U.S. Gulf output was shuttered ahead of Zeta, which is expected to make landfall in Louisiana late Wednesday.
Oil is testing the lower end of its recent trading range as the dollar strengthened and as coronavirus cases climb across Europe and the U.S., raising concerns the fragile demand recovery may be derailed. The market is also facing rising supply from Libya, presenting OPEC+ with some tough decisions on the future of its output cuts when the producer group meets at the end of next month.
See also: BP (NYSE:) Warns of Long ‘Slog’ to Recovery After Surprise Profit
U.S. gasoline inventories expanded by 2.25 million barrels last week, while crude supplies at the key storage hub of Cushing climbed by 136,000 barrels, according to the API. The median estimate in a Bloomberg survey forecast nationwide crude stockpiles increased by 1.5 million barrels
©2020 Bloomberg L.P.
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.