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Oil

Oil prices dip as US pipeline outage fears ease, India COVID-19 outbreak hits demand

Published: Updated:

Oil prices fell on Tuesday on fading fears of a prolonged outage of the largest US fuel pipeline system, while India’s coronavirus crisis showed scant sign of easing.

Brent crude futures dropped 30 cents, or 0.4 percent, to $68.02 a barrel by 1000 GMT. US West Texas Intermediate (WTI) crude futures fell 32 cents, or 0.4 percent, to $64.60 a barrel.

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Oil was retreating amid weak sentiment as Asian stocks suffered a tech-led selloff and the market shrugged off concerns about a temporary shutdown of the Colonial Pipeline, DailyFX strategist Margaret Yang said.

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Colonial Pipeline, which transports more than 2.5 million barrels per day (bpd) of gasoline, diesel and jet fuel, said on Monday it was working to restore much of its operations by the end of the week.

Traders booked at least four tankers to store refined oil products off the US Gulf Coast refining hub following a cyber attacks that knocked out the pipeline, shipping data showed on Tuesday.

The US gasoline futures contract and US heating oil futures, which rose after the outage, have retreated to pre-Friday levels on the prospect of the restart.

Meanwhile, sentiment is weighed down by the rapid spread of coronavirus infections in India, which has increased calls to lock down the world’s second-most populous country and the third largest oil importer and consumer.

On the bullish side for crude, analysts are expecting data to show US inventories fell by about 2.3 million barrels in the week to May 7, following an 8 million-barrel drop the previous week, according to a Reuters poll.

Gasoline stocks are expected to have fallen by about 400,000 barrels, analysts estimated ahead of reports from the American Petroleum Institute industry group on Tuesday and the US Energy Information Administration on Wednesday.

OPEC is also expected to publish its monthly oil market report at 1120 GMT.

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