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Oil extends losses as stockpile rise amid weakening demand

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Oil prices fell for a second day on Friday, pressured by a surprise rise in U.S. stockpiles as the coronavirus pandemic continues to erode demand for fuels.

Brent crude was down 18 cents, or 0.5 per cent at $39.88 a barrel by 0337 GMT, after falling nearly two per cent on Thursday.

U.S. crude dropped 14 cents, or 0.4 per cent to $37.16 a barrel, having fallen two per cent in the previous session.

Both major benchmarks are down around 6.5 per cent for the week and headed for a second week of declines, as hopes dim for a steady recovery in fuel demand amid signs of second-wave coronavirus outbreaks.

In the U.S., stockpiles rose last week against expectations, as refineries slowly returned to operations after production sites were shut down due to storms in the Gulf of Mexico and wider region.

“While U.S. crude oil production continues to recover following Hurricane Laura, the numbers show that refineries further reduced run rates over the last week,’’ ING Economics said in a note.

U.S. crude inventories rose 2.0 million barrels, compared with forecasts for a 1.3 million-barrel decrease in a Reuters’ poll.

In a further bearish sign, traders were starting to book tankers again to store crude oil and diesel, amid a stalled economic recovery as the COVID-19 pandemic continues unabated

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