2020.07.0810:02:00UTC+00Oil Prices Ease On Oversupply Concerns

Oil prices eased on Wednesday after industry data showed a build in U.S. crude stockpiles and the U.S. Energy Information Administration (EIA) forecast a lower decline in U.S. output in 2020.

Benchmark Brent crude dropped 0.2 percent to $42.98 a barrel, while U.S. West Texas Intermediate (WTI) crude futures were down 0.3 percent at $40.48 a barrel.

Adding to worries about oversupply, the American Petroleum Institute reported late Tuesday that U.S. crude supplies rose by 2 million barrels for the week ended July 3, against expectations for a draw. Gasoline and distillate inventories fell more than expected, offering some respite.

Meanwhile, the EIA said on Tuesday it expects U.S. petroleum and other liquid fuel consumption to drop 2.1 million bpd to 18.34 million bpd in 2020, a smaller decline than its previous forecast for a drop of 2.4 million bpd.

A spike in coronavirus cases in the United States and other parts of the world also tempered optimism about a recovery in fuel demand.

More U.S. states reported record numbers of new infections, with Florida facing an impending shortage of intensive care unit hospital beds. California reported more than 10,000 coronavirus cases on Tuesday, a record rise for a single day.

The Australian state of Victoria saw another record rise in daily coronavirus cases, which led to lockdown measures being reimposed in Melbourne, the country's second-biggest city.

Dr Michael Ryan, emergencies chief of the WHO said the rise in cases was not due to widespread testing, but because the epidemic was "accelerating."

Also, the WHO on Tuesday acknowledged the emerging evidence of airborne spread of the novel coronavirus after an open letter by over 200 scientists outlined evidence that showed floating virus particles can infect people who breathe them in.