Oil Prices Were Pushed Down as An Outcome of Rising Crude Oil Inventories
The U.S Energy sector is hard-hit due to continuous decline in the prices of crude oil. Lately, decrement in the prices of oil as a result of U.S-China conflict has affected the trade between these two countries. However, in the fourth week of January the effect of this conflict on trade seemed to have paled as an outcome of a treaty signed on 15 January to upsurge the trade between these two leading economies. Also, oil exports from Libya were cut on 18 January, in response to the persuading actions from Germany and UN on commander Khalifa Haftar at Berlin Summit to disrupt his campaign to take Tripoli. This disruption in export pipeline has forced the shut-down of its state-owned National Oil Corporation’s two major oil production units. Despite the trade deal signed between U.S and China and recent shut in Libya’s oil production, oil prices continued to experience a downward swing in the U.S. as an effect of astonishing levels of crude oil inventories as reported by American Petroleum Institute (API) in the third week of January. As of 17 January 2020, API has assessed the crude inventory levels at around 1.57 million barrels. Moreover, fall in the oil prices was upheld by outbreak of Coronavirus in China, this virus has likely affected the domestic as well as international transportation, thereby taking down the demand for jet fuel. In addition to the large crude oil inventories, API also reported the rising gasoline and distillate inventories by 3.2 million barrel and 3.5 million barrel a week respectively.