Oil price has been seesawing worryingly in the last
few days, reflecting the volatile nature both in the political and economic
realms, partly being shored up by the pandemic and the possibility of its ‘second coming’.
The demand has been very low and it’s understandable
in the current circumstances.
Analysts, however, appeared to have overlooked a significant
factor that the EIA, the US Energy Information Agency, identified that
determines the oil price – the oil inventory build-up.
The EIA said on Thursday that US crude stocks rose
by 2 million barrels a day when the analysts estimated a drop of 1.3 million
barrels a day – a strange reversal of figures – in the week leading to September
4.
The EIA particularly blamed the rise in stocks on Hurricane
Laura that hampered the activities at the refineries. In addition, the weak
demand in jet fuel and gasoline contributed to the surge in stocks.
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