Oil prices dropped more than 7% on Thursday amid a broader market sell-off as fears over a second wave of coronavirus cases led to investors shedding assets.
Oil has been rallying on the back of an uptick in demand paired with record supply cuts, but data on Wednesday from the U.S. Energy Information Administration showed a surprise build in inventory, suggesting that the demand recovery may have stalled.
Another key driver of WTI's recent recovery, which has seen prices jump more than 50% in the last month, has been producers curbing output. Over the weekend, OPEC and its oil-producing allies agreed to extend its record production curb — equivalent to about 10% of pre-coronavirus global demand — through the end of July.
But with oil moving higher in recent weeks, some producers have begun to open the taps once again, which could send prices lower. "How prices develop further will depend a lot [on] how much and how quickly this shut production will come back to business," she added.
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