Oil prices have slipped after an unexpected increase in US oil inventories, triggering new demand concerns.
Brent crude futures dropped $0.18 to $48.66 a barrel, while the US West Texas Intermediate (WTI) crude futures slipped $0.15 to $45.45 per barrel, reported Reuters.
Earlier, the American Petroleum Institute (API) said that the US crude stocks soared by 1.14 million barrels, though analyst forecasts in a Reuters poll predicted a draw of 1.42 million barrels.
However, the oil prices held some earlier gains due to positive Covid-19 vaccine developments as the UK commenced mass-inoculation of its population.
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Sunward Trading chief analyst Chiyoki Chen was quoted by the news agency as saying: “The build in US crude inventories raised a sense of caution among investors and prompted them to unwind long positions ahead of the [Energy Information Administration] EIA data.
“But brighter news about progress in vaccines development and hopes for US economic stimulus by President-elect Joe Biden kept overall market sentiment upbeat.”
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Despite the vaccine development, several countries continue to struggle to contain the spread of coronavirus cases, with Germany and South Korea announcing new strict measures.
Last week, OPEC+ oil producing group agreed to increase production by 500,000 barrels per day (bpd) next month. The group is expected to hold next meeting on 4 January 2021.
Separately, EIA had revised its US crude oil production forecast for next year to 11.10 million bpd.
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