The price of Brent crude fell below $56 a barrel on Thursday, due to greater increase in oil stocks than expected in the US.
Brent’s May crude oil futures dropped 22 cents to $55.69 a barrel, and US’s April futures fell by 53 cents to $44.13 a barrel, Reuters reported.
Losses were limited due to a weaker dollar, as the US Federal Reserve indicated a slower pace of increase in interest rates. A weaker dollar makes commodities cheaper for holders of other currencies.
Sydney CMC Markets chief market analyst Ric Spooner was quoted by the news agency as saying: "The harsh reality of last night’s build in inventory is starting to set in on oil prices."
"The weaker U.S. dollar was supportive of commodity prices, but another big build in inventory might mean the upside on oil prices is limited until there is some turnaround in US oil production."
According to the data from the Energy Information Administration (EIA ), US crude stocks increased by 9.6 million barrels last week, nearly three times as much as analysts’ expectations.
In particular, EIA reported that the Cushing, Oklahoma, oil hub had reached a new record, with crude stocks rising by 2.865 million barrels, to 54.4 million barrels.