U.S. crude oil inventories increased by 2.7 million barrels

In New York, Oil prices steadied near $47 a barrel. It subsequently came under pressure from signs of boosted U.S. supply and the epidemic’s resurgence.

West Texas Intermediate (WTI) futures recouped earlier losses but remained approximately 4% down this week. According to the American Petroleum Institute, U.S. crude inventories increased by 2.7 million barrels last week. It would be the second weekly rise in three if confirmed by official figures.

Additionally, President Donald Trump’s suggestion that he might not sign a stimulus bill into law also declined financial markets.

New virus increases can sap energy demand

Furthermore, the new coronavirus strain increases the risk of more stay-at-home measures that would sap energy demand. Significantly, the new virus mutation possibly reached the U.S., Germany, Switzerland, and France. The United Kingdom is considering putting more people under a severe lockdown to stop its spread.

According to analysts at PVM Oil Associates, Stephen Brennock, Jitters surrounding the virus’s new strain remain front and center. He said that the specter of new restrictions now hangs over Europe together with the prospect of a drawn-out rebound.

Brent’s prompt time-spread has moved back into contango, a bearish market structure where near-dated prices are lower than later-dated ones.

Alexander Dyukov, Chief Executive Officer at Gazprom Neft PJSC, announced that global demand for oil liquids wouldn’t return to pre-virus levels until early or middle of 2022.

Furthermore, WTI for February delivery reached $47.10 a barrel on the New York Merchantile Exchange. Meanwhile, Brent for February settlement was steady at $50.17 on the ICE Futures Europe exchange after declining 1.6% in the previous session.

According to the API, U.S. distillate stockpiles rose by 1.03 million barrels last week. At the same time, there was a small slump in gasoline inventories. Analysts surveyed by Bloomberg are anticipating a three million-barrel fall in crude stockpiles ahead of the Energy Information Administration data.