Oil prices have declined on lingering concerns about a weak demand outlook, after an unexpected decrease in US crude stocks.
Brent crude futures dropped by 17 cents to $61 a barrel while the US West Texas Intermediate (WTI) crude futures reduced by 32 cents to $55.65 per barrel, reported Reuters.
The data released by the US Energy Information Administration (EIA) highlighted a 1.7 million barrels fall in US crude stocks last week when compared with analysts’ expectations for a 2.2 million barrel build.
Capital Economics chief commodities economist Caroline Bain told the news agency: “Oil prices are likely to remain subdued in the near term as the global economy continues to slow and risk aversion prevails.”
The EIA also noted that the decline in weekly stocks came as refineries increased crude runs and due to a drop in oil imports, which resulted in a sharp gain in both benchmark crude grades.
OANDA senior market analyst Jeffrey Halley was quoted by Reuters as saying: “A surprise fall in both official US crude inventories and gasoline stocks was supportive for oil overnight.
“But with the supply side of the global oil equation still ascendant, rallies are likely to be limited and short-term in nature.”
Comprising OPEC and other major oil-producing countries, a group known as OPEC+ has implemented an agreement to reduce oil production by 1.2 million barrels per day (Mbpd) until March next year, which started since this January.
The deal was aimed at supporting the market.