Oil holds loss after entering bear market as US storage jump

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Oil holds a loss – after slumping 3.4% and entering a bear market – as ballooning US inventories raised fears of a supply glut at the same time as demand is drying up.

The Ras Laffan Industrial City, Qatar’s principal site for production of liquefied natural gas and gas-to-liquid.

Futures in New York edged higher after falling as much as 0.8% earlier. US total petroleum stockpiles jumped by 22 million barrels last week, the biggest increase in data going back to 1990, government figures showed Wednesday. Data from countries representing around half of global oil consumption shows year-on-year demand growth ground to halt in a March and April, Morgan Stanley said in a note in which it cut its Brent forecast for the second half.

“The high inventory levels are spooking markets at the moment,” said Howie Lee, an economist at Oversea-Chinese Banking Corp. in Singapore. Investors have also realized the drop in demand will be worse than they thought “because it seems like there is no end to where the US draws a line on picking a trade war with every other country,” he said.

 

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