Yemisi Izuora
Oil prices fell on Thursday as gasoline inventories in the United States, the world’s largest oil consumer, rose for a fifth consecutive week although a draw in crude stockpiles helped to underpin prices.
Brent crude futures fell by 16 cents, or 0.2 per cent to $68.80 barrel while the U.S. West Texas Intermediate (WTI) crude futures dropped by 20 cents, or 0.3 per cent to $65.43 a barrel.
Both Brent and U.S. crude futures hit their highest since mid-March on Wednesday before retreating. The $70-per-barrel mark has acted as a barrier for the market since Brent broke just above that level in March, with investors unwilling to push oil higher as COVID-19 cases increase in parts of the world.
“Oil prices fell in response to U.S. gasoline stockpiles rising,” analysts from Commonwealth Bank of Australia said in a note. They said, however, the drop in prices is unwarranted as U.S. demand remains strong.
U.S. crude stocks fell last week more than expected as refining output rose and exports surged, the Energy Information Administration said on Wednesday.
Crude inventories fell by 8 million barrels in the week to April 30 to 485.1 million barrels, compared with expectations in a Reuters poll for a 2.3 million-barrel drop.
U.S. gasoline stocks rose by 737,000 barrels in the week, the EIA said, against a forecast for 652,000-barrel draw.
Pandemic-related restrictions in the United States and parts of Europe are easing, but infections are still on the rise in major crude oil importers India and Japan, weighing on prices.
Meanwhile, militants using bombs attacked two oil wells at an oilfield close to the northern Iraqi city of Kirkuk on Wednesday, killing at least one policeman and setting off fires, the country’s oil ministry said.
Industry sources said the attack had not affected output. An oil ministry statement did not comment on production.