London: Oil fell for a second day after an unexpected jump in US crude stockpiles unnerved a market already anxious about faltering global demand.
Futures in New York dropped as much as 1.18 per cent, after falling by 0.9 per cent at the close on Wednesday. American oil inventories grew by 2.8 million barrels last week, government data showed, compared with analyst estimates for a draw of 2.5 million barrels. The dollar also advanced, adding another headwind to crude prices.
Oil prices have risen about 30 per cent this quarter as the Organization of the Petroleum Exporting Countries and its allies embarked on a mission to curtail global output, while American sanctions on Iran and Venezuela have also been supportive. Demand is less certain, with US and European indicators pointing to slowing economies and Washington and Beijing resuming high-level talks this week in a bid to defuse their trade war.
Oil prices are lower ‘probably in response to yesterday’s US inventory data,” Commerzbank analysts including Carsten Fritsch wrote in a report.
West Texas Intermediate for May delivery dropped 79 cents, or 1.33 per cent, to $58.62 on the New York Mercantile Exchange as of 7:27am local time. It fell 53 cents on Wednesday.
Brent for May settlement, which expires Friday, fell 73 cents to $67.10 on the London-based ICE Futures Europe exchange. The contract has risen about 25 per cent so far this quarter. The global benchmark crude was at a premium of $8.44 to WTI.
Nationwide inventories in the US rose for the first time in three weeks to about 442.3 million barrels in the period ended March 22, according to Energy Information Administration data. Stockpiles at the Cushing, Oklahoma, oil storage hub increased by 541,000 barrels to 46.9 million.
The Bloomberg Dollar Spot Index rose 0.2 per cent, while the global bond rally showed signs of easing on Thursday. Treasuries turned lower alongside most sovereign debt in Europe, as investors greeted the end of the first quarter in a far from jubilant mood.