Oil prices fell in early trade on Thursday for the third straight day as a result of data showing an unexpectedly big gain in U.S. oil storage last week. This data, together with indications of weaker Chinese demand, raised concerns about an oversupply. The price of Brent crude futures for August delivery dropped by 40 cents, or 0.6%, to $72.20 per barrel, while the price of WTI crude for the United States dropped by 39 cents, or 0.6%, to $67.70 per barrel. Following significant drops the previous day, both benchmarks stabilized on Wednesday by more than $1.
According to market sources citing American Petroleum Institute data on Wednesday, the United States crude oil stockpiles increased by around 5.2 million barrels over the previous week. In contrast, a Reuters poll predicted a drop of 1.4 million barrels. According to the report, petrol inventories unexpectedly posted an increase of approximately 1.9 million barrels in the week ending May 26, vs expectations for a decrease of about 500,000 barrels.
Market investors are currently anticipating government data on US crude stockpiles, which is scheduled for release later on Thursday. Due to a U.S. holiday earlier this week, the data was delayed by a day. Data from China, the world’s second-largest oil consumer, revealed that factory activity shrank more quickly than anticipated in May. After receiving conflicting signals thus far over the likelihood of additional cuts, investors were also keeping an eye on the upcoming OPEC+ meeting on June 4.
This group includes allies such as Russia. Analysts at HSBC and Goldman Sachs have stated that they do not anticipate OPEC+ to announce additional cutbacks at this meeting. Investors who worry that the Federal Reserve would raise interest rates again in June and perhaps reduce fuel demand in the United States, the world’s largest user of oil, were alarmed by Wednesday’s unexpectedly positive labor market data.
