Oil Oversupply Fears Surface

24 June 2020

    Oil futures have continued their drop Tuesday, following the news that US crude stockpiles grew way more than the expected 1.7 million barrels, and oversupply fears have started to surface again.

     

    Brent was down 29 cents, settling at approximately $42.34 a barrel, while WTI saw a 35 cent drop, leaving it at around $40.02 a barrel.

     

    Nevertheless, there is a positive side of the coin. US inventories have fallen, giving birth to optimism on economic recovery, as economies reopen and fuel consumption picks up. Global oil consumption had generally started to recover, while OPEC+ has slashed its output. 

     

    China, the world's top crude importer, in turn, is expected to slow crude imports in the third quarter, as higher oil prices hurt demand and worries about a second wave of the coronavirus outbreak linger.


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