Oil prices have dropped after weekly data reported an unexpected increase in crude inventories in the US.
Brent futures fell 3 cents to $69.28 per barrel while US West Texas Intermediate (WTI) crude dropped 8 cents to trade at $62.38 a barrel, reported Reuters.
According to the Energy Information Administration (EIA), crude oil stocks in the US increased by 7.2 million barrels last week. The increase of crude inventories is against expectations as market analysts predicted a drop of 425,000 barrels.
Most of the increase was in the Gulf Coast, where inventories jumped by 8.7 million barrels. EIA data also added that US crude production increased by 100,000 barrels per day (bpd) to touch 12.2 million barrels per day (Mbpd), further putting pressure on global oil prices.
Both the benchmarks touched their highest peak since November 2018 earlier this week owing to ongoing supply cuts led by Organization of the Petroleum Exporting Countries (OPEC).
OPEC member countries along with key other allies such as Russia have agreed to reduce oil output by 1.2 Mbpd in 2019, with global benchmark Brent gaining around 30% and WTI increasing by nearly 40%. Ongoing US sanctions against key petroleum producer Iran also supported the oil market.
Energy Aspects oil analyst Virendra Chauhan told Reuters that the refinery maintenance season is coming to an end, which in turn is expected to increase crude demand, saying: “The physical market is very strong and we are now starting to trade post-turnaround barrels, which should mean physical markets strengthen and flat prices should follow.”