Oil prices extended losses early Thursday as industry statistics from the United States, the world’s biggest oil producer and consumer, reflected a rapid and dramatic increase in crude inventories, raising doubts of an easy rebound in demand as economies continue to ease coronavirus lockdowns.
The development triggered two daily losses in a row after fears emerged regarding Russia’s willingness to honour significant oil output cuts in the build-up to conference in June between member nations of the Organisation of the Petroleum Exporting Countries and its ally group, known as OPEC+.
U.S. West Texas Intermediate (WTI) crude futures had shed 4.4% or $1.44 as of 05:02 West African Time, trading at $31.37 per barrel after going down by 5% to a low of $31.14 at the earlier session.
Brent crude futures dived by 3.2% or $1.10 to $33.64 per barrel.
On Wednesday, Nigeria’s Bonny Light had depressed by 2.32% or $0.79 to end the day’s trade at $33.28 a barrel.
“A surprise to consensus API (American Petroleum Institute) inventory build (data) and fear of Russia turning up production weighs on oil prices.
“As is often the case during a run-up up to an OPEC+ meeting, the focus is squarely on Russia’s commitment and understandably so as historically they have been the laggard within the OPEC+,” Chief Global Markets Strategist at AxiCorp, Stephen Innes, told Reuters.
OPEC+ will be on a lookout to see if U.S. shale oil producers will ramp up production with WTI lingering above $30 per barrel, Lachlan Shaw of National Australia Bank said.
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