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Oil prices snapped its five-day winning streak despite a weekly inventory report showing stockpiles rose less than expected last week.
U.S. oil inventories rose by 4.6 million barrels in the week ended May 1, according to the Energy Information Administration, less than the 7.76 million-barrel build that analysts surveyed by Refinitiv were expecting. Inventories, which increased by 8.99 million barrels last week, have risen for 15 consecutive weeks.
West Texas Intermediate crude oil, the U.S. benchmark, fell 2.32 percent to $23.99 a barrel. Brent crude oil, the international standard, lost 4.04 percent to $29.72.
Demand is still a problem as “50 million people in this country could be unemployed” by the end of this quarter, Stephen Schork, editor of the daily oil newsletter The Schork Report, told FOX Business’ Stuart Varney on Wednesday. “That translates into 40 million commuters that are not going to be on the roads.”
WTI has soared 115 percent over the past five sessions as traders have begun pricing in states reopening their economies from lockdowns intended to curb the spread of the COVID-19 pandemic and demand for refined oil products such as gasoline and jet fuel slowly returning.
Demand for crude oil has fallen by 30 million barrels per day as “stay-at-home” orders from governments all over the world have brought non-essential travel to a crawl.
At the same time, the world’s largest oil producers have begun cutting production by 20 million barrels per day on May 1.
Schork said the “overarching concern” is that 50 million people could be unemployed by this summer, meaning 40 million fewer commuters will be on the roads. In April alone, 20 million jobs were cut by companies forced to close their doors because of the coronavirus, according to payroll-processor ADP.
“We've got a tremendous amount of destruction to this economy, and it is going to take much longer for it to recover,” Schork said.