Oil prices fall to two-week low on U.S. inventory shock

The prices of crude oil fell on Thursday to their lowest in two weeks, after official data revealed a shock jump in U.S. inventories of crude.

Prices also suffered from rising cases of COVID-19 in Europe, Russia, and some outbreaks in China which dented hopes of full economic recovery.

Brent crude fell 94 cents, or 1.1 per cent, to $83.64 a barrel by 0655 GMT, having hit a two-week low of $82.32 earlier and fallen by 2.1 per cent in the previous session.

U.S. oil was down 89 cents, also a 1.1 per cent drop, at $81.77 a barrel – a one-week low after dropping 2.4 per cent on Wednesday, Reuters reported.

The outbreaks of COVID19 infections in China and record deaths and the threat of lockdowns in Russia, along with rising cases in western Europe were putting the brakes on a multi-week recovery in oil prices.

READ ALSO: Oil prices climb to highest levels in years

Reuters quoted ANZ Research commodities strategists, Daniel Hynes and Soni Kumari as saying, “A surge in new cases of COVID-19 threatens to disrupt the recovery in oil demand”.

The news agency also quoted Citi Research commodities analysts as saying that the “hefty” stock build came “on the back of a large jump in net imports of crude oil and still sluggish refinery processing”.