Oil prices have declined on signs of smaller-than-expected draw on US crude stockpiles and also due to global economy concerns.
Front-month Brent crude futures LCOc1 edged down 2 cents at $63.80 per barrel, while US West Texas Intermediate (WTI) crude futures CLc1 slipped 23 cents at $57.11 per barrel, Reuters reported.
Cantor Fitzgerald Europe told Reuters: “Gains were capped by the Energy Information Administration (EIA) reporting a weekly decline of 1.1 million barrels in crude stocks, versus the three million barrels forecast by analysts and five million barrels reported by the API a day earlier.”
British Royal Marines detained a supertanker which was carrying Iranian crude oil to Syria, a move due to which markets appeared to be largely unmoved.
Data published by the EIA highlighted a fall in US inventories as refineries in the country consumed less crude last week compared to the prior week. This suggests that US oil demand may slow amid signs of a weakening global economy.
Furthermore, government data showed that new orders for US factory goods declined for a second straight month in May, adding to the economic worries.
Vanguard Markets managing partner Stephen Innes said: “Tossing aside the short-term nature of fluctuations around the inventory data, it’s impossible to escape the economic reality that we are in the midst of a global manufacturing downturn.”
Output is set to be restricted as the Organization of the Petroleum Exporting Countries and other producers such as Russia agreed with regard to extension of supply cuts until March 2020.