Oil prices fell again today after demand worries were revived following new weak data from the US and increasing oil inventories in the country.
Brent crude plunged by 55 cents to $110.14 a barrel, while US crude slipped by 65 cents to $96.54 a barrel, reported Reuters.
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The American Petroleum Institute released its data, which showed that crude oil stocks in the US jumped by 4.7 million barrels for the week ended 29 March, higher than the 2.2 million predicted in a Reuters survey.
According to investors, the rise in inventory is mainly due to a weak economy that is still struggling to recover, and restricting oil demand growth.
Oil prices in the US also came under pressure after a prolonged pipeline outage in the Midwest that ultimately led to a buildup in stockpiles close to the delivery point of the benchmark contract in Cushing, Oklahoma.
Investors predict the pipeline shutdown is likely to add about 300,000 to 400,000 barrels a week to crude inventories at Cushing.
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By GlobalDataMarkets will keep a close watch on key US jobs data, scheduled to be released this week, to get a better indication on the outlook of the world’s largest economy and its oil demand.
On Tuesday, a survey showed that manufacturing activity contracted for a second straight month in the UK, while factory activity expanded at its slowest rate in three months in March in the US, indicating a sluggish outlook for global oil demand.
Traders have pointed out that seasonal refinery maintenance has also affected demand for oil in Europe.
Image: API data showed that crude oil stocks in the US increased 4.7 million barrels for the week ended 29 March. Photo courtesy of freedigitalphotos / Vichaya Kiatying-Angsulee.
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