Oil prices fell in early trade on Thursday for the third consecutive session as data showed an unexpectedly significant gain in US oil storage last week, raising worries of an oversupply amid signs of lower Chinese demand.
Brent crude futures for August delivery slipped 40 cents, or 0.6%, to $72.20 per barrel by 00:23 GMT, while U.S. West Texas Intermediate crude (WTI) plummeted 39 cents, or 0.6%, to $67.70 per barrel.
Both benchmarks had dropped more than $1 on Wednesday after significant drops the day before.
According to market sources quoting American Petroleum Institute numbers on Wednesday, U.S. crude oil inventories increased by around 5.2 million barrels last week. This compares to a Reuters survey that predicted a 1.4 million barrel drawdown.
According to the statistics, gasoline stockpiles unexpectedly increased by over 1.9 million barrels in the week ending May 26, contrary to predictions for a drop of roughly 500,000 barrels.
Market participants now expect government data on U.S. crude stocks due later on Thursday. The data was late by a day due to the U.S. holiday earlier this week.
Meanwhile, statistics from China indicated that factory activity fell quicker than predicted in May, raising concerns about demand in the world’s second-largest oil user.
Investors were also looking at the meeting of OPEC+ scheduled for June 4, the organization of the Petroleum Exporting Countries and their alliances, including Russia, following the mixed signal on whether further cuts are possible.
HSBC and Goldman Sachs have said that they do not anticipate OPEC+ presenting additional cuts at this meeting.
Unexpectedly robust labor market data on Wednesday also jolted investors who worry the Federal Reserve may increase interest rates again in June, possibly cutting fuel demand in the U.S., the world’s largest oil buyer.
A bill to suspend the U.S. government’s $31.4 trillion debt ceiling and prevent a devastating default cleared a vital procedural obstacle in the House of Representatives on Wednesday, paving the way for a vote on the bipartisan debt deal itself.
