Oil plunges after a surprise gain in crude stocks

As per the industry data, oil prices decreased on Thursday due to a surprise rise in the United States crude inventories that revived COVID-19 pandemic-led demand worries, but stimulus expectations in the US restricted the dip in prices. The WTI crude futures declined to 24 cents, or 0.5% a barrel, following two days of increments on hopes of massive coronavirus relief spending under the new president of the country, Joe Biden. Brent crude slipped to $55.86 a barrel.

According to the information issued from the American Petroleum Institute, the crude inventories of the United States increased to 2.6 million barrels in the week to 15th of January, as compared with the predictions of the analysts’ that generated a decline of 1.2 million barrels. 

Oil prices look a bit vulnerable to desirable profit-making after the crude stockpiles of the United States gained 2.56 million against accord draw, said by the chief market strategist. However, gasoline stocks as well as distillate inventories, which contain jet fuel, distillate, and diesel increased by less than analysts had anticipated. The United States Energy Information Administration is all set to issue its week-wise inventory report on Friday.

The head of commodities strategy, ING, Warren Patterson, said that holding the industry back ae also persistent concerns over demand. He further said that worries have climbed with a rise in coronavirus cases in China leading to aimed lockdowns. And that’s why, the Us government will be excited to capture any outbreaks under control, mainly with the Chinese New Year fast arriving.

Reportedly, the administration of Joe Biden has committed to restricting carbon discharges and among his first decisions as president, Biden declared the country’s return to the Paris climate agreement and reversed a grant for the Keystone XL oil pipeline project from Canada. The administration is also devoted to closing new oil & gas renting on federal lands.