Oil extends losses as U.S. inventories climb amid weak demand

Oil prices slid for a second day on Friday, weighed by a sudden increase in U.S. crude inventories as fuel demand struggled amid the coronavirus pandemic.

Brent crude fell 0.5%, or 18 cents, at $39.88 per barrel after falling almost 2% on Thursday. U.S. crude lost 0.4%, or 14 cents, at $37.16 per barrel following a 2% decline in the last session.

Both benchmarks fell 6.5% for the week and on course for a second week of drops.

U.S. stockpiles climbed last week against analysts’ expectations as refineries gradually reopened operations following the shutdown of the U.S. Gulf due to storms.

U.S. crude stocks gained 2 million barrels against analysts’ expectations for a 1.3-million-barrel decline. Traders are beginning to hire tankers to store crude oil and diesel amid a lagging economic recovery.

Onshore storage continues to outstrip demand, making floating storage cheap and ideal for investors.

Meanwhile, OPEC’s monitoring panel is likely to discuss the increasing stockpiles at its Sept. 17 meeting, as well as the need for further supply cuts.