Oil prices fall on US-China tensions, weak factory data

The sun is seen behind a crude oil pump jack in the Permian Basin in Loving County - Reuters

LONDON (Reuters): Oil prices fell yesterday on worries that a global oil glut may persist even as coronavirus pandemic lockdowns start to ease, amid a fresh spat between the US and China over the origin of the virus.

Brent crude was down 86 cents, or 3.3%, at $ 25.58, at 0828 GMT.

US West Texas Intermediate (WTI) crude fell $ 1.57, or 7.9%, to $ 18.21.

While global oil demand is expected to modestly recover from April lows as countries ease some lockdown measures, the glut created over months in storage facilities will loom over the markets.

“As oil inventories are likely still increasing over the coming weeks, oil prices remain vulnerable to renewed setbacks,” said UBS analyst Giovanni Staunovo.

However, Goldman Sachs was more optimistic than before about the rise of oil prices next year due to lower crude production and a partial recovery in oil demand.

The Wall Street bank raised its 2021 forecast for global benchmark Brent to $ 55.63 per barrel from $ 52.50 earlier. The bank hiked its estimate for WTI to $ 51.38 a barrel from $ 48.50 previously.