Oil prices extended their decline for a third consecutive day on Thursday, as the market grappled with unexpected increases in both crude and gasoline stockpiles in the United States, coupled with reduced supply concerns.
Brent futures retreated by 30 cents, equivalent to a 0.35% drop, settling at $85.52 per barrel, while U.S. West Texas Intermediate crude registered a 42-cent decrease, or a 0.50% decline, reaching $83.07 per barrel. This retreat has virtually erased the early-week gains, following a significant 2% slump in the previous session.
According to reports referencing American Petroleum Institute data from Wednesday, U.S. crude oil stockpiles surged by approximately 12.9 million barrels, a sharp contrast to the mere 500,000-barrel increase that analysts had predicted in a Reuters poll.
ING analysts noted, “Unlikely to help sentiment this morning are API inventory numbers…Lower refinery run rates due to maintenance likely contributed to this build.”
In addition to the substantial crude stockpile increase, gasoline inventories also experienced a notable uptick of 3.6 million barrels, deviating from analysts’ expectations of an 800,000-barrel reduction.
This unexpected rise further fueled concerns regarding a potential slowdown in fuel demand within the United States. JP Morgan analysts observed, “Fuel prices may be closer to consumers’ pain threshold than inflation-adjusted prices might suggest. There are already signs that consumers have responded by cutting back on fuel consumption.”
