Crude oil prices dipped after the official data revealed an unexpected surge in the US gasoline stocks, raising concerns over waning demand.
Brent crude fell by $0.36, or 0.6%, to reach $62.80 a barrel while the US oil fell $0.38, or 0.6%, to reach $59.39 a barrel, reported Reuters.
The US Department of Energy said that the country’s crude stocks fell more than analysts’ forecast while the gasoline inventories in the country witnessed a sharp rise.
Last week, oil inventories dropped to nearly 502 million barrels by 3.5 million barrels whereas the gasoline stocks surged by four million barrels to reach over 230 million barrels as production was increased by the refiners prior to the summer season.
Mizuho Securities energy futures director Bob Yawger was cited by the news agency as saying: “Refiners may want to pull back on the run rate a bit to keep gasoline storage from challenging the all-time record.”
Meanwhile, global supply is also rising supported by Russia’s increased production output in the first few days of April from average levels in March, traders said.
Currently, talks are underway between the US and other powers on reviving the nuclear deal signed in 2015 that almost stopped oil supply to the market from Iran.
Upon lifting the sanctions, Iran is expected to add production to global supplies.
However, massive public spending to help contain the Covid-19 pandemic might result in 6% global growth in 2021, the International Monetary Fund said earlier this week.
Demand for oil and its products is expected to boost with higher economic growth, supporting reduced stockpiles.