Oil prices posted record losses in two days as U.S. crude oil inventories unexpectedly expanded, offsetting an eighth weekly plunge in the world’s largest economy crude stockpiles, according to EIA.
The black viscous hydrocarbon arbitrarily broke below the $74.50 mark after strong declines witnessed at the mid-week trading session affirmed the return of the correctional bearish trend, as weakened sentiments pre-empt the continuation of such trend to test $73 a barrel as its next target.
Data retrieved from the Energy Information Administration showed U.S. gasoline stockpiles rallied up by more than 1 million barrels last week. Energy experts had predicted a 2-million barrels drop. Distillate inventories also ticked up by about 3.7 million barrels, more than expected, while oil supplies tanked by 7.9 million barrels.
At the early hours of Thursday, Brent crude futures September settlement had drawdowns of nearly 1% as it traded around $74 a barrel on the ICE Futures Europe exchange after losing more than 2% on Wednesday.
Oil bulls are currently staying on the sidelines amid reports the United Arab Emirates will get a better offer under a compromised supply agreement allowing OPEC+ to lift supply in the coming months, further suggests other members might likely ask for such privileges.
Oil price dynamics got altered after the oil cartel group momentarily postponed plans to boost supply from next month due to an impasse with the United Arab Emirates, while resurging COVID-19 attacks added more concerns into the short-term demand outlook in spite of warnings that the world’s most liquid commodity market might tighten significantly if OPEC didn’t add more barrels.
Chart patterns show oil bulls are held hostage below the $74 a barrel mark with the world’s second-largest economy showing signs of exhaustion though Chinese economic data posted consumer spending picked up in Q2.
Market analysts argue OPEC+ infighting and upsurge in COVID-19 attacks have made the energy market more sensitive to volatility.
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This article was originally posted on FX Empire