Oil falls 2% despite surprise US stock drawdown

Crude had rallied on optimism that slumping fuel demand would recover.

Oil prices fell about 2% on 13 May despite the first decline in US crude inventories since January, as the US Federal Reserve chairman stoked demand fears with a solemn address warning the economy would take many months to recover from the coronavirus pandemic.

Oil had rallied on optimism that slumping fuel demand would recover, whilst producers slashed production to cut the mounting supply glut during the pandemic. But crude slid along with other risk assets like stocks on 13 May due to the government signals that a rebound may take awhile.

Global benchmark Brent crude settled down $1.12 (US$0.79), or 2.6% at $41.43 (US$29.19) a barrel. West Texas Intermediate crude futures, the US benchmark, settled down $0.70 (US$0.49), or 1.9% at $35.9 (US$25.29) a barrel.

Here’s more from Reuters.