Oil prices dipped slightly on Wednesday, remaining at four-month lows after industry data pointed to an unexpected buildup in U.S. crude inventories.
The data, which came amid a series of weaker-than-expected U.S. economic indicators, added to concerns over slowing oil demand as economic growth cools.
Benchmark futures extended losses
Brent crude futures for August delivery fell 0.1 percent to $77.44 a barrel, while West Texas Intermediate (WTI) crude futures slipped 0.1 percent to $72.98 a barrel as of 20:53 ET (00:53 GMT). Both benchmarks extended losses for a sixth straight session, approaching their weakest levels since early February.
Read more: Oil prices tumble to 4-month low amid demand concerns, OPEC production outlook
API reports surprise inventory increase
The American Petroleum Institute (API) reported that U.S. crude inventories rose by around 4 million barrels in the week to May 31, defying expectations for a 1.9 million barrel draw. Gasoline and distillate stockpiles also registered builds, raising more worries about demand in the world’s largest fuel consumer, even as the peak summer driving season began.
The potential inventory build came despite the Memorial Day holiday weekend, which typically marks the start of the summer season.
The API data usually foreshadows a similar reading from the official government inventory report, which is due on Wednesday.
Steep losses amid demand fears and OPEC+ outlook
Oil prices have suffered steep losses this week, especially after OPEC and its allies signaled plans to begin scaling back some production cuts later this year. This presented a bearish outlook for oil prices heading into 2025, particularly if demand remains stagnant. Weak economic data from major global consumers has added to these demand concerns.
Weak U.S. economic indicators raise demand worries
In the U.S., disappointing readings on job openings, the manufacturing purchasing managers’ index, and downwardly revised GDP have all raised fears of cooling economic growth, which could translate to softer oil demand in the coming months.
Top oil importer China also posted mixed purchasing managers’ index numbers for May.
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