Oil Dips on Bleak Economic Outlook – 19 May, 2020

After three weeks of rising prices, oil took another dip caused by the uncertainty over the lasting economic effects caused by the coronavirus outbreak. U.S. West Texas Intermediate crude futures were down 13 cents or 0.4% for July at $31.83 per barrel. Brent crude futures were 11 cents or 0.3% lower for July to $34.54 per barrel. For the first time in over a month, both benchmarks broke above $30 due to a speculation that the easing lockdown restrictions would boost demand, as well as production cuts by OPEC and other major producers. U.S. Federal Reserve Chairman Jerome Powell’s comments that state and local government layoffs would slow economic recovery, casting a less than optimistic outlook of the longterm effects of the virus and improving demand. Crude inventories in the U.S. dropped by 4.8 million barrels to 512.3 million barrels in the week of May 15.