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Oil Prices Dip, Supply Concerns Resurface on Rising US Stocks

Oil Prices Dip, Supply Concerns Resurface on Rising US Stocks
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By Staff, Agencies

Oil prices reversed course to edge lower on Wednesday as a higher than expected rise in the US inventories refocused investors on the risk of oversupply amid a coronavirus-driven slump in fuel demand.

US West Texas Intermediate [WTI] crude CLc1 futures fell 27 cents, or 1.1%, to $24.29 a barrel by 0436 GMT, snapping a five-day winning streak.

Brent crude LCOc1 futures dipped 20 cents, or 0.7%, to $30.77 a barrel, ending a six-day rise.

Oil slipped after a report showed US crude inventories rose 8.4 million barrels last week, more than expected, according to data from the American Petroleum Institute [API] late on Tuesday.

Oil prices had gained recently as European and Asian countries ended lockdowns aimed at halting the coronavirus spread and as producers axed supply after the demand crunch.

Analysts, however, cautioned the rebalancing of the market would be choppy.

Global inventories are still expected to reach potential storage limits by June, according to Chris Midgley, Global Director of Analytics of S&P Global Platts.

Gasoline stocks in the US, the world’s biggest producer and consumer of oil, fell by 2.2 million barrels, API reported, compared with analysts’ expectations in a Reuters poll for a 43,000 barrel increase, and refinery crude runs rose.

Traders will be looking for further confirmation of the inventory data when the Energy Information Administration comes out later on Wednesday.

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