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Oil drops after U.S. inventory build renews oversupply concerns

Published 06/10/2020, 09:38 AM
Updated 06/10/2020, 09:40 AM
© Reuters.
LCO
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TOKYO, June 10 (Reuters) - Oil prices fell on Wednesday as
an industry report showed a rise in crude and fuel inventories
in the United States, renewing concerns about oversupply and
slumping fuel demand in the world's largest crude consumer.
Brent crude futures LCOc1 fell 57 cents, or 1.4%, at
$40.61 a barrel by 0055 GMT after gaining nearly 1% on Tuesday.
West Texas Intermediate (WTI) futures declined 68 cents, or
1.8%, to $38.26 a barrel, having risen about 2% in the previous
session.
Both contracts rose to their highest in three months on
Monday but some analysts think the market has risen too far, too
fast as the coronavirus pandemic sweeps across the world with
new infections posting daily highs. "The slide in Brent most likely fits into the profit-taking
category after an extended run for oil with no new fundamental
data that would justify a shift in sentiment," said Stephen
Innes, chief global markets strategist at AxiCorp.
U.S. crude inventories climbed 8.4 million barrels in the
week to June 5, API data showed, while a Reuters poll of
analysts had indicated a draw of 1.7 million barrels.
Distillate fuel stockpiles, including diesel fuel and
heating oil, rose by 4.3 million barrels, outpacing expectations
for a 3 million barrel increase.
Official government figures on stockpiles from the Energy
Information Administration are due later on Wednesday. API/S
While layoffs fell in the U.S. in April, hiring hit a record
low indicating it will take many years for a recovery in the
labour market in the world's biggest economy.

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