Oil prices fell on Wednesday after data from the American Petroleum Institute showed an increase in US crude stockpiles by one million barrels in the week ending 19 February.
Brent crude futures fell by $0.06, or 0.1%, to $65.31 a barrel while US West Texas Intermediate (WTI) crude futures dropped by $0.29, or 0.5%, to reach $61.38 a barrel, reported Reuters.
According to Reuters technical analyst Wang Tao, Brent may grow into a range of $66.45-$66.97 per barrel again, as indicated by its wave pattern and an estimation analysis.
Commonwealth Bank analyst Vivek Dhar said: “The key question is how quickly does US oil supply recover.
“It looks like supply will recover faster than refineries, and supply is going to outpace demand in the next few weeks. That will give negative weight to the market.”
Due to a deep freeze in the southern US states, demand from refineries, which were temporarily shut down, has been restricted.
The Houston ship channel is witnessing traffic slowly returning to normal. However, terminals were still facing many issues as a result of last week’s freezing weather in Texas.
Energy consultancy Trifecta director Sukrit Vijayakar said: “This rally has certainly overshot itself. We are at levels much higher than pre-Covid and demand nowhere near those levels.”