Crude slides on US supply build, fears of COVID-19 resurgence

Singapore — 0210 GMT: Crude oil futures were trading lower in mid-morning trade in Asia June 18 after latest US inventory data showed a rise in crude stockpiles for a second consecutive week, while fears of a resurgence in COVID-19 cases dampened demand recovery.

At 10:10 am Singapore time (0210 GMT), ICE Brent August crude futures were down 58 cents/b (1.42%) from the June 17 settle at $40.13/b, while the NYMEX July light sweet crude contract was 76 cents/b (2%) lower at $37.20/b.

US commercial crude stocks climbed 1.22 million barrels to a fresh all-time high of 539.28 million barrels in the week ended June 12, US Energy Information Administration data showed June 17.

"We maintain our view that while we expect prices to continue increasing through the year, oil is expected to see short-term bearish pressures as we head towards the end of Q2," OCBC analysts said in a June 18 note.

While optimism came from a drawdown in gasoline and distillate stocks, the indicative improvement in demand failed to uplift sentiment as fresh COVID-19 outbreaks in the US and China continued to cast doubt on recovery.

China continues to tackle a potential resurgence in COVID-19 cases, reporting 28 new coronavirus cases as of end-June 17, media reports showed. Out of this, 21 cases were in Beijing.

The US recently saw record spikes in COVID-19 cases in six states as the economy gradually reopens.

On the OPEC+ front, the Joint Ministerial Monitoring Committee will meet via webinar later in the day.

Delegates had said the JMMC meeting is likely to focus on assessing compliance with quotas in May, and calculating volumes that over-producing countries will have to compensate for with additional cuts this summer.

In its latest monthly oil market report released June 17, OPEC kept its 2020 forecasts largely unchanged from the May outlook, noting a historic contraction in oil demand, but improving fundamentals in the months ahead.