Yemisi Izuora
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.
Brent crude futures fell 57 cents, or 1.4 per cent, at $40.61 a barrel after gaining nearly 1 per cent on Tuesday, while, West Texas Intermediate, WTI, futures declined 68 cents, or 1.8 per cent, to $38.26 a barrel, having risen about 2 per cent 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.
US 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.
Distillate fuel stockpiles, including diesel fuel and heating oil, rose by 4.3 million barrels, outpacing expectations for a 3 million barrel increase.
While layoffs fell in the US in April, hiring hit a record low indicating it will take many years for a recovery in the labour market in the world’s biggest economy.