Oil futures edged lower yesterday, extending losses from the previous day, after U.S. crude stockpiles grew more than expected, adding to worries about oversupply, although a fall in gasoline stocks kept the decline in check.
Brent crude was down 2 cents at $42.61 a barrel, while U.S. West Texas Intermediate (WTI) crude futures fell 4 cents, or 0.1 per cent, to $40.33 a barrel.
U.S. crude inventories rose by a much bigger than expected 1.7 million barrels last week, according to industry group the American Petroleum Institute (API), well ahead of analysts’ expectations for a 300,000-barrel build.
However, U.S. gasoline and distillate inventories fell, the data showed, feeding optimism that fuel consumption is picking up as some economies ease lockdowns imposed to contain the coronavirus pandemic.
Global oil consumption has started to recover as economies emerge from lockdown, while the Organisation of the Petroleum Exporting Countries (OPEC) and allied producers have slashed output and U.S. shale producers have shut in wells.
On Tuesday, both Brent and WTI contracts traded at their highest levels since prices collapsed in early March.
Still, the market remains concerned about a rising number of coronavirus cases in the United States and elsewhere, said Kazuhiko Saito, chief analyst at Fujitomi Co.
New cases of COVID-19 rose 25 per cent in the United States in the week ended June 21 compared to the previous seven days, a Reuter’s analysis found.
China, the world’s top crude importer, is also expected to slow crude imports in the third quarter, after record purchases in recent months, as higher oil prices hurt demand and refiners worry about a second virus outbreak.
