Crude oil prices managed to touch a four-month low as concerns over a supply imbalance, along with China’s stock market crash, weighed upon the commodity. There continues to be mounting concern over slowing demand within China and the global crude oil glut that just will not abate. Despite the growing concerns, Brent has managed to remain above the $50 a barrel level, whilst WTI crude is facing pressure at the $47.00 handle. This is significantly higher than forward analysis would have suggested some months back. However, whilst this excessive supply issue remains in frame oil prices must move lower to establish stable price equilibrium.
Oil prices gained on Friday as global equity markets extended their slide. Meanwhile, data from the Energy Information Administration (EIA) showed U.S. crude stockpiles jumped more than expected last week.
“The enhanced volatility in the market in general is spilling over into energy, as investors are reducing risk,” said Rob Thummel, managing director at Tortoise, which manages $16 billion in energy-related assets. “When you have volatile equity markets, the risk-off trade is happening and you’ve got a third consecutive build, that’s generally not a good recipe for crude oil prices.”
Meanwhile, the EIA reported on Thursday that U.S. crude inventories rose by 6 million barrels last week, compared with the general consensus of a 2.6 million-barrel increase.
Just a week earlier, the EIA reported a near-8-million barrel build in U.S. crude stocks, which was quadruple expectations.
more at source: https://www.investing.com/news/commodities-news/oil-prices-gain-as-equity-markets-extend-slide-us-crude-inventories-rose-1641610