Oil slips over unexpected build in US fuel stocks
Low demand concerns linger with US gasoline inventory rise of 7 million barrels last week
Oil prices slipped on Thursday before hitting new high levels from the stalemate in Iran-US talks, while a hefty rise in US fuel stocks ahead of the summer driving season exerted downward pressure, signaling sliding demand.
International benchmark Brent crude was trading at $71.76 per barrel at 07.09 GMT for a 0.63% loss after closing Wednesday at $72.22 a barrel.
American benchmark West Texas Intermediate (WTI) traded at $69.56 a barrel at the same time with a 0.57% decrease after ending the previous session at $69.96 per barrel.
Brent oil price reached a record high level since May 2019 at $72.85 a barrel during the previous trading session. Likewise, WTI attained $70.63 a barrel, hitting the highest level since October 2018.
The record-high oil prices came following the remarks of US Secretary of State Antony Blinken, who said hundreds of sanctions targeting Iran are likely to remain in place even if Iran and the US return to compliance, including those imposed by the Trump administration.
This signaled to investors that Iranian barrels would not soon be added to the market, relieving oversupply concerns.
However, oil prices came under pressure after the US Energy Information Administration (EIA) announced Wednesday that the country’s gasoline inventories rose by 7 million barrels, or 3%, during the week ending June 4. The hefty build was mainly caused by less driving activity during the country’s Memorial Day weekend last week.
Crude oil inventories, however, decreased by 5.2 million barrels, or 1.1%, during the same period.