Oil prices down with weak demand, rising supply glut

By Ovunc Kutlu

ANKARA (AA) - Crude oil prices were down on Monday, as global oil demand remains weak causing a rising glut of supply around the world.

International benchmark Brent crude was trading at $30.55 per barrel at 0641 GMT for a 1.36% decline after closing Friday at $30.97 a barrel.

American benchmark West Texas Intermediate (WTI) was at $24.46 a barrel at the same time for a 1.13% loss after ending Friday at $24.74 per barrel.

In the heart of US oil pipeline networks Cushing, Oklahoma, storage capacity has increased by 2 million barrels to reach 65.4 million barrels for the week ending May 1, according to the US Energy Information Administration (EIA).

While Cushing has a total storage capacity of 76 million barrels, this means that over 86% of stock capacity is full in the hub.

US crude oil production, however, has decreased by 2.1 million barrels per day (mbpd) in the past two months to 11.9 (mbpd) for the week ending May 1, according to the EIA data.

Crude output in the country is expected to fall further, since the number of oil rigs in the US, an indicator of short-term production in the world's largest crude producing country, has declined for the eighth consecutive week up to the week ending May 8, Baker Hughes data showed.

On the demand side, the novel coronavirus (COVID-19) continues to keep most of the world under quarantine and poses a major challenge to economic activity.

With the easing of COVID-19 measures, oil consumption and crude demand are expected to increase in the second half of the year.