Meanwhile, U.S. inventory builds are much lower than thought: File Image/PixaBay
Crude achieved more gains on Thursday due to U.S. Energy Information Administration data showing that inventories rose only 414,000 barrels last week, much less than analytical predictions of a 2.5 million barrel build.
Brent settled up 19 cents at $59.31 per barrel, while West Texas Intermediate settled up 45 cents at $53.94 per barrel.
However, the latest session suggested inconsistency in the mindset of traders: on Wednesday, crude achieved substantial price gains on new-found fears of oil shortages (due to export problems in Libya and Venezuela); 24 hours later, traders were enthused by the prospect, however ephemeral, that inventories were less than anticipated.
Carsten Fritsch, commodity analyst, Commerzbank
The current upswing is due to easing concerns about the spread of the coronavirus
But that didn't detract from the issue that has influenced the market for the past several weeks, namely, China's coronavirus, and Thursday's gains were said to have been capped by reports of new outbreaks and a first death in South Korea, plus research suggesting the outbreak could be more contagious than previously thought.
Still, Carsten Fritsch, commodity analyst at Commerzbank, noted that “The current upswing is due to easing concerns about the spread of the coronavirus; what is more, there appear to be concerns that the U.S. sanctions imposed on a Rosneft trading unit could deter foreign buyers.”
As if to show there's no clear line of thought on what the market will do next, Phil Flynn, senior market analyst at Price Futures Group Inc., said of the EIA numbers, "What seems to be pulling us back down a little bit is concerns of coronavirus kicking back in a little bit.”