Oil prices fell on Thursday after official figures showed a big increase in U.S. gasoline stocks, causing concerns about demand for crude weakening in the world’s biggest consumer of the resource at a time when supplies around the world are rising.
Brent crude eased 36 cents, or 0.6%, to $62.80 a barrel by 0136 GMT.
U.S.WTI fell 38 cents, or 0.6%, to $59.39 a barrel.
While crude stocks in the United States fell more than forecast by analysts, gasoline inventories jumped sharply against expectations, the Department of Energy said on Wednesday.
Oil inventories dropped by 3.5 million barrels last week to nearly 502 million barrels. In comparison, gasoline stocks increased by 4 million barrels, against expectations of a decline, to just over 230 million barrels, as refiners ramped up production before the summer driving season.
“Refiners may want to pull back on the run rate a bit to keep gasoline storage from challenging the all-time record.”Bob Yawger, Director of Energy Futures, Mizuho Securities.
However, markets express concerns about the prospects of rising crude production even as demand continues to remain weak. In the initial few days of the current month, Russia’s oil output has been on the rise compared to production levels seen last month.
OPEC+ on Increasing Crude Oil Supply
Meanwhile, OPEC+ has also signaled interest in increasing crude supply by 2 million BPD by July. Even though economists anticipate an improvement in the overall outlook for the global economy this year, which could raise oil demand, there remain considerable uncertainties due to the recent spike in cases being seen across Europe and emerging markets like Brazil and India.
Higher economic growth would boost demand for oil and its products, helping to reduce stockpiles.