Oil prices fell on Wednesday as industry data showed a bigger- than-expected inventory build in the United States where coronavirus cases continue to climb, potentially further denting demand in the world’s biggest oil consumer.
In his first briefing in months focused on the pandemic, U.S. President Donald Trump said that the outbreak would probably get worse before it gets better, one of his first recent acknowledgements of the spread of the problem.
Industry group American Petroleum Institute (API) reported U.S. crude inventories rose last week by 7.5 million barrels compared with expectations for a draw of 2.1 million.
Brent crude fell 32 cents, or 0.7%, to $44 a barrel by 0156 GMT, and U.S. West Texas Intermediate (WTI) crude dropped 33 cents, or 0.8%, to $41.59.
Oil prices climbed about $1 the previous day, reaching their highest since March 6.It rose on Tuesday on optimism for a COVID-19 vaccine and after European Union lenders agreed on a 750 billion-euro ($859 billion) fund to prop up coronavirus-hit economies.
Still, the effect of those funds on prompt oil prices will be mute as it may take months to start flowing and the impact may take years to show, Stephen Innes, chief global markets strategist at AxiCorp said in a note on Wednesday.
There are also signs that Iraq, the second-largest producer in the Organization of the Petroleum Exporting Countries (OPEC), is still not meeting its target under an OPEC-led supply cut deal.