Brent Crude slumps, COVID-19 fears dampens oil demand

Brent crude futures were down 89 cents, or 2.2%, at $40.07 at 6 am local time

The rise in America’s crude inventories (world’s largest consumer of Brent Crude), stoked concerns about an oil glut pressured Brent crude, as the number of COVID-19 caseloads surpassed 8 million worldwide

The international benchmark for crude gained more than 3% yesterday after the International Energy Agency (IEA) raised its 2020 oil demand forecast to 91.7 million barrels per day and U.S posted a positive retail data.

What you need to know about Brent? Brent crude is the leading global benchmark for Atlantic basin crude oils. The international benchmark is used to set the price of crude oil of about of two-thirds of the world’s traded crude oil

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“API data showed a build in crude inventories, and rising new coronavirus cases in the United States and China have dampened expectations of improving fuel demand in the world’s top two oil consumers,” said Kim Kwang-rae, commodity analyst at Samsung Futures in Seoul.

Meanwhile, the Russians and Saudis have agreed to the 9.7 million barrels per day cuts scheduled for July under OPEC+ pact.

The major oil-producing countries were also thinking of imposing conditions on countries like Nigeria, and Iraq, which haven’t complied with the oil output cuts.