Oil prices have edged down due to an increase in US crude inventories by a much bigger than expected 1.7 million barrels last week.

The decline, which extended losses from the previous day, added to oversupply concerns.

Brent crude slipped $0.29 or 0.7% at $42.34 a barrel, while US West Texas Intermediate (WTI) crude futures were down $0.35 or 0.9% to $40.02 a barrel, Reuters reported.

Data related to the rise in US crude oil inventories was released by industry group the American Petroleum Institute (API).

API data further reported a fall in gasoline inventories, feeding hopes that fuel demand is picking up as some nations lifted lockdowns which have been imposed to limit the spread of the Covid-19 pandemic.

Sunward Trading chief analyst Chiyoki Chen was quoted by the news agency as saying: “Some investors took profits after the recent rally as they saw higher US crude stockpiles.”

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On 23 June, both the benchmarks traded at their highest levels since prices crashed in early March this year.

The Organization of the Petroleum Exporting Countries (OPEC), including Russia and other producers, together known as OPEC+, have been reducing supply by about 9.7Mbpd since 1 May.

Earlier this month, the group also agreed to extend output cuts until the end of next month.

According to Fujitomi chief analyst Kazuhiko Saito, the market still remains worried about an increasing number of Covid-19 cases in the US and elsewhere.

In the week that ended on 21 June, new Covid-19 infections rose 25% in the US.

The death toll in Latin America has surpassed 100,000 on 23 June, according to a Reuters tally.

Chiyoki Chen added: “We expect Brent to be traded between $35-45 a barrel for the next week as concerns over a second wave of the coronavirus pandemic will limit gains, while reduced supply from OPEC+ will lend support.”