Oil drops after U.S. inventory build renews oversupply concerns
Oil prices fell on Wednesday as an industry report showed a rise in crude and fuel inventories in the United States, renewing concerns about oversupply and slumping fuel demand in the world’s largest crude consumer, Reuters reports.
Brent crude futures LCOc1 fell 57 cents, or 1.4%, at $40.61 a barrel by 0055 GMT after gaining nearly 1% on Tuesday.
West Texas Intermediate (WTI) futures declined 68 cents, or 1.8%, to $38.26 a barrel, having risen about 2% in the previous session.
Both contracts rose to their highest in three months on Monday but some analysts think the market has risen too far, too fast as the coronavirus pandemic sweeps across the world with new infections posting daily highs.
“The slide in Brent most likely fits into the profit-taking category after an extended run for oil with no new fundamental data that would justify a shift in sentiment,” said Stephen Innes, chief global markets strategist at AxiCorp.
U.S. crude inventories climbed 8.4 million barrels in the week to June 5, API data showed, while a Reuters poll of analysts had indicated a draw of 1.7 million barrels.