World oil prices fell sharply on Wednesday news that US commercial crude inventories rose by more than expected last week, indicating weakening demand and stoking supply glut concerns.
At around 16.45 GMT, US benchmark West Texas Intermediate for delivery in October recoiled USD 1.55 to USD 44.80 per barrel. Brent North Sea crude for the same month lost a hefty USD 1.30 to USD 47.07 a barrel compared with the closing level.
The US government’s Department of Energy (DoE) reported that commercial crude inventories rose by 2.3 million barrels in the week to August 26. That easily outstripped market expectations for a smaller gain of 1.3 million barrels, according to analysts polled by Bloomberg News, and followed a 2.5-million gain the previous week.
Last week’s increase also exceeded an estimated rise of 900,000 barrels from industry body the American Petroleum Institute.
“Oil prices added to early declines after DoE inventory data showed a build,” said CMC Markets analyst Jasper Lawler.
Rising US stockpiles tend to send oil prices lower because they add to the global supply glut – and indicate weakening demand in the world’s top consumer of crude. The DoE added today that gasoline or petrol reserves fell 700,000 barrels, while distillates – including diesel and heating fuel – rose 1.5 million.
