U.S. West Texas Intermediate crude oil is under pressure on Friday and in a position to close lower for a second consecutive week on growing demand worries and an unexpected rise in U.S. stockpiles that raised new concerns about oversupply. The U.S. benchmark is on track to lose about 6% this week.
The market has been under pressure all week starting with Saudi Arabia’s surprise move to cut prices on oil it supplies to Asia by $1.00 starting in October. A second wave of selling pressure is being fueled by a surprise rise in U.S. stockpiles as the coronavirus pandemic continues to erode demand for fuels.
Compounding the weakness was a second consecutive weekly decline in U.S. stock indexes as well as U.S. economic indicators that suggested a long and difficult recovery from the coronavirus pandemic.
Additionally, further dampening the markets mood, the U.S. Senate killed a Republican bill that would have provided around $300 billion in new coronavirus aid. In another bearish sign, traders were starting to book tankers again to store crude oil and diesel, amid a stalled economic recovery at the COVID-19 pandemic continues.
Saudi’s Cut Prices to Asia
The world’s top oil exporter Saudi Arabia cut the October official selling price for Arab Light crude it sells to Asia by the biggest margin since May. Asia is Saudi Arabia’s largest market by region.
The price cut, scheduled for October shipments, is likely a sign that…