LONDON: Oil prices slumped on Thursday, dragged down by another record build-up in US crude inventories and the US Federal Reserve’s projections that the world’s biggest economy would shrink 6.5% this year.
Brent crude futures erased Wednesday’s gains, falling 6.6%, or $2.74, to $38.99 a barrel by 1342 GMT. US West Texas Intermediate (WTI) crude dropped 7.6%, or $3.02, to $36.58 a barrel.
Both benchmarks are set for their worst daily drops since April 21 and 27, respectively.
“Prices are once again under pressure as concerns over the pace of the demand recovery intensified,” said Rystad Energy’s oil markets analyst Paola Rodriguez Masiu.
US crude inventories rose unexpectedly by 5.7 million barrels in the week to June 5 to 538.1 million barrels — a record — as imports were boosted by the arrival of supplies bought by refiners when Saudi Arabia flooded the market in March and April, Energy Information Administration (EIA) data showed.
It also showed gasoline stockpiles grew more than expected to 258.7 million barrels. Distillate stockpiles, which include diesel and heating oil, rose by 1.6 million barrels, although the increase was smaller than in previous weeks.
Adding to the pressure on prices, the US Federal Reserve said US unemployment was set to reach 9.3% at the end of 2020 and it would take years to fall back, while interest rates were expected to stay near zero at least through next year.
Total US coronavirus cases topped 2 million on Wednesday, with new infections rising slightly after five weeks of declines, according to a Reuters analysis.
“No significant price relief is anticipated in 2020 but next year promises to become tighter due to improving consumption,” said PVM oil analyst Tmas Varga.
“For this forecast to prove accurate, however, assistance is required from the world’s swing producers. OPEC+ needs to stick to the April deal and keep its agreed 5.8 mbpd output restraints below the October 2018 baseline all through next year.”
Oil prices set for worst daily drop since April on inventories, bearish Fed
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Oil prices set for worst daily drop since April on inventories, bearish Fed
- Analyst Paola Rodriguez Masiu: Prices are once again under pressure as concerns over the pace of the demand recovery intensified
- US crude inventories rose unexpectedly by 5.7 million barrels in the week to June 5 to 538.1 million barrels
Saudi POS spending jumps 28% in final week of Jan: SAMA
RIYADH: Saudi Arabia’s point-of-sale spending climbed sharply in the final week of January, rising nearly 28 percent from the previous week as consumer outlays increased across almost all sectors.
POS transactions reached SR16 billion ($4.27 billion) in the week ending Jan. 31, up 27.8 percent week on week, according to the Saudi Central Bank. Transaction volumes rose 16.5 percent to 248.8 million, reflecting stronger retail and service activity.
Spending on jewelry saw the biggest uptick at 55.5 percent to SR613.69 million, followed by laundry services which saw a 44.4 percent increase to SR62.83 million.
Expenditure on personal care rose 29.1 percent, while outlays on books and stationery increased 5.1 percent. Hotel spending climbed 7.4 percent to SR377.1 million.
Further gains were recorded across other categories. Spending in pharmacies and medical supplies rose 33.4 percent to SR259.19 million, while medical services increased 13.7 percent to SR515.44 million.
Food and beverage spending surged 38.6 percent to SR2.6 billion, accounting for the largest share of total POS value. Restaurants and cafes followed with a 20.4 percent increase to SR1.81 billion. Apparel and clothing spending rose 35.4 percent to SR1.33 billion, representing the third-largest share during the week.
The Kingdom’s key urban centers mirrored the national surge. Riyadh, which accounted for the largest share of total POS spending, saw a 22 percent rise to SR5.44 billion from SR4.46 billion the previous week. The number of transactions in the capital reached 78.6 million, up 13.8 percent week on week.
In Jeddah, transaction values increased 23.7 percent to SR2.16 billion, while Dammam reported a 22.2 percent rise to SR783.06 million.
POS data, tracked weekly by SAMA, provides an indicator of consumer spending trends and the ongoing growth of digital payments in Saudi Arabia.
The data also highlights the expanding reach of POS infrastructure, extending beyond major retail hubs to smaller cities and service sectors, supporting broader digital inclusion initiatives.
The growth of digital payment technologies aligns with Saudi Arabia’s Vision 2030 objectives, promoting electronic transactions and contributing to the Kingdom’s broader digital economy.
