- Russia doesn’t expect oil demand to recovery quickly.
- Sharp drop in US private sector employments revive energy demand concerns.
- US crude oil inventories expected to increase by 7.7 million barrels last week.
After posting decisive gains on Monday and Tuesday, crude oil prices came under strong pressure on Wednesday. The barrel of West Texas Intermediate (WTI), which rose more than 30% in the last two days, slumped to a daily low of $24.75 before recovering modestly. As of writing, the WTI was down 6.6% on the day at $25.30.
Demand concerns return
Earlier in the day, Russian Deputy Energy Minister Pavel Sorokin said that they were not expecting the global oil demand to return to the pre-crisis level quickly. Sorokin further argued that a second of wave of an economic slowdown was still possible.
Meanwhile, the monthly data published by the ADP Research Institue showed that the private sector employment in the US declined by more than 20 million in April. Ahead of Friday’s NFP report, this reading reminded investors of the unprecedented impact of the coronavirus outbreak on the US economy and weighed on the market sentiment.
Later in the session, market participants will be keeping a close eye on the US Energy Information Administration’s (EIA) Weekly Petroleum Status Report. Experts forecast that the report will show an increase of 7.7 million barrels in the US crude oil stocks in week ending May 1st.
Share
