Crude-oil futures slid Wednesday as investors watched for a monthly OPEC report on global inventories and a weekly update from the U.S. EIA on supplies, after a weekly industry report late Tuesday showed an increase in inventories.
The American Petroleum Institute reported Tuesday that U.S. crude supplies rose by about 3.9 million barrels for the week ended June 12. The API data also showed gasoline stockpiles rose by 4.3 million barrels, while distillate inventories climbed by 919,000 barrels.
“Oil prices can’t shake oversupply concerns and short-and-medium term demand weakness,” wrote Edward Moya, senior market analyst at Oanda, in a Wednesday research report. “The API report suggests that oil stockpiles are not leaving their record highs anytime soon,” he said.
The report comes ahead of a monthly report from the Organization of the Petroleum Exporting Countries due later Wednesday, after the cartel and its allies, in a group known as OPEC+, agreed earlier this month to extend production cuts of nearly 10 million barrels per day through July and to review the status of adherence to those reductions monthly.
A report on weekly U.S. stocks from the Energy Information Administration also is due at 10:30 a.m. Eastern and are expected to show crude inventories declined by 3.5 million barrels last week, according to analysts polled by S&P Global Platts. They also forecast a supply decline of 2.2 million barrels for gasoline and an increase of 3.1 million barrels for distillate inventories.
Against the backdrop, West Texas Intermediate crude for July delivery, the U.S. benchmark, was down 62 cents, or 1.6%, at $37.77 a barrel on the New York Mercantile Exchange, after settling 3.4% higher on Tuesday.
Global benchmark Brent oil for August delivery lost 51 cents, or 1.3%, at $40.45 a barrel on ICE Futures Europe following a 3.1% rise in the previous session.
Markets gained on Tuesday after the International Energy Agency said that, while the world’s demand for crude will drop by 8.1 million barrels a day in 2020, “the largest in history,” demand in 2021 will bounce back by 5.7 million barrels a day, the “largest one-year jump ever recorded.”