US Crude Oil Inventories Decrease... International Oil Prices Reach Highest Level Since March

September India WTI on 12th (local time) closes at $42.67, up 2.6% from previous day

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] International oil prices, which plummeted during the COVID-19 pandemic, reached their highest level since March on the 12th (local time).

According to Bloomberg and others, West Texas Intermediate (WTI) crude oil for September delivery on the New York Mercantile Exchange (NYMEX) closed at $42.67 per barrel, up 2.6% ($1.06) from the previous trading day. This is the highest level since March 5th ($46.54).

WTI prices had reached $59.79 in January, approaching the $60 mark, but then declined amid concerns over increased supply. The prices plummeted during March and April due to the COVID-19 crisis. Some international oil prices even fell into negative territory, but they gradually rose as oil supply decreased and the COVID-19 situation prolonged.

Major foreign media analyzed that prices rose due to a decrease in U.S. crude oil inventories. According to the U.S. Energy Information Administration (EIA), U.S. crude oil stocks fell by 4.5 million barrels last week. As lockdown measures eased and economic activities slowly recovered, demand for gasoline and other fuels increased while supply decreased, pushing prices up.

However, overall oil demand this year is expected to decline more than anticipated. Although demand for gasoline increased, the use of passenger planes remains slow to recover due to the COVID-19 impact, resulting in a 45% drop in jet fuel consumption compared to the same period last year. The Organisation for Economic Co-operation and Development (OECD) had forecasted a reduction of 8.95 million barrels in global oil demand a month ago but has now revised this estimate to 9.06 million barrels.

Meanwhile, international gold prices, which had fallen the most in seven years the previous day, maintained the $1,900 level. On the New York Commodity Exchange, December delivery gold closed at $1,952.70 per ounce, up 0.3% ($6.40) from the previous day.