TOKYO (Reuters) – Crude prices fell on Thursday after official data showed a sharp increase in U.S. gasoline inventories, raising concerns over weakening demand among the world’s largest oil consumer at the time as the world’s crude supplies increase.
Brent fell 51 cents, or 0.8%, to $ 62.65 a barrel at 6:48 a.m. GMT. US oil fell 53 cents, or 0.9%, to $ 59.24 a barrel.
While US crude oil inventories fell more than analysts expected, gasoline inventories rose sharply, also against expectations, the US Department of Energy said on Wednesday.
Oil inventories fell 3.5 million barrels last week to nearly 502 million barrels, and gasoline inventories rose 4 million barrels, against expectations of a drop, to just over of 230 million barrels, as refiners ramped up production ahead of the summer driving season. [EIA/S]
“Refiners may want to reduce the fill rate a bit to prevent gasoline storage from jeopardizing the all-time record,” said Bob Yawger, director of energy futures at Mizuho Securities.
At the same time, supply is increasing across the world, with Russian production increasing from average March levels during the first few days of April, traders said.
Iran may see some sanctions lifted and add to global supply, with the US and other powers leading talks on reviving a nuclear deal that nearly kept Iranian oil from arriving on the market.
Still, the International Monetary Fund said earlier this week that massive government spending to tackle the COVID-19 pandemic could push global growth to 6% this year, a rate not reached since the 1970s.
Higher economic growth would stimulate demand for oil and its products, helping to reduce inventories.
“A more positive macroeconomic environment is also likely to attract more investor interest in the sector,” ANZ Research said in a note, reiterating its view that Brent will hit $ 75 per barrel in the third quarter. .
Reporting by Aaron Sheldrick; Editing by Muralikumar Anantharaman and Tom Hogue