Oil prices fell on Wednesday, reversing gains earlier today, despite data showing a sharp drop in US crude and gasoline inventories.
The shift to crude losses came as Wall Street heavy losses dampened investment sentiment in all risky asset markets.
In this climate, US crude for June delivery lost $ 2.81, or 2.5%, to close at $ 109.59 a barrel. Brent crude for July delivery fell $ 2.82, or $ 2.55, to $ 109.11 a barrel.
The Energy Information Administration (EIA) said U.S. crude stockpiles fell 3.4 million barrels in the week ended May 13, while gasoline stockpiles fell 4.8 million barrels and refined stockpiles rose 1 percent. 2 million barrels. Analysts surveyed by S&P Global Commodity Insights expected oil reserves to increase by 2.1 million barrels, while gasoline was expected to fall by 100,000 barrels and refined ones were projected to fall by 1 million barrels.
The U.S. Petroleum Institute said late Tuesday that U.S. crude inventories fell 2.4 million barrels last week, while gasoline inventories fell 5.1 million barrels.
Earlier gains in crude prices were partly linked to hopes of easing coronavirus restrictions in China, the world’s largest importer of crude, analysts said. Optimism about “much higher oil demand and prices” is positive for producers, albeit harmful to the consumer climate, said Stephen Innes, chief executive of SPI Asset Management.
Data in the United Kingdom on Wednesday showed that annual consumer prices climbed to a four-decade high due to higher energy prices.
The European Union’s failure to persuade Hungary to lift its veto on a Russian oil embargo has increased price pressures, although some diplomats expect an agreement on a gradual embargo at a summit in late May.
Ongoing supply concerns, however, persisted. Russia’s crude oil production in April fell nearly 9 percent from a month earlier, according to an OPEC + report yesterday, as Western sanctions against Moscow cut exports.