AUTONEWS

The oil ordeal

NEW YORK - Oil prices plunged around 8% on Thursday, fueled by new concerns about the destruction of demand as new cases of coronavirus rise around the world and after commodity stocks in the U.S. have reached a peak. record.
Brent oil futures, an international benchmark, ended in a fall of $ 3.18, or 7.6%, to $ 38.55 a barrel. US oil (WTI) fell $ 3.26, or 8.2%, and closed at $ 36.34 a barrel.
This was the biggest daily setback for Brent and WTI since April 21st and 27th, respectively.
Coronavirus cases in the U.S. surpassed 2 million on Wednesday, according to Reuters count, with a slight increase in infections after five weeks of decline.
And although most US states have eased restrictions on the movement of people that impacted demand, fuel consumption remains 20% below normal levels, as consumers remain cautious.
In addition, the US Federal Reserve has expressed concern that this will continue, limiting demand.
"A series of local cases can have the effect of undermining people's confidence in traveling and going to restaurants and (entertainment) options," said Fed chief Jerome Powell on Wednesday.
Oil has risen in recent weeks after governments eased restrictions associated with the coronavirus, which led to optimism that demand for fuels could recover.
But US inventories grew unexpectedly last week, to a record 538.1 million barrels, while gasoline inventories also rose more than expected, to 258.7 million barrels.
"The picture of the fundamentals still brings bearish factors to which the market was turning a blind eye," said Tradition Energy's director of market research, Gene McGillian. 

Stephanie Kelly