Oil prices depreciated on Wednesday after data showed a surprisingly large build in gasoline (petrol) and diesel inventories in the United States.
The price of Brent crude went down by 77 cents or 1.2 per cent to trade at $64.86 per barrel and the US West Texas Intermediate (WTI) crude shrank by 56 cents or 0.9 per cent to$62.85 a barrel.
Crude oil inventories in the US fell by 4.3 million barrels during the week ending May 30, according to data from the U.S. Energy Information Administration released on Wednesday.
However, for total motor gasoline, the EIA estimated that inventories increased by 5.2 million barrels for the week to May 30, even with daily production decreasing to an average 9 million barrels, from 9.8 million barrels in the week prior.
For middle distillates, there was an increase of 4.2 million barrels, with production increasing to 5 million barrels daily. This compares to an inventory decline of 700,000 barrels in the week prior, when production stood at an average of 4.8 million barrels daily.
On Tuesday, the American Petroleum Institute (API) reported a drop of 3.3 million barrels in US crude oil inventories, with a sizable build in gasoline stocks.
Market analysts noted that there was a strong increase in refinery demand for crude, resulting in a large crude draw. However, post-Memorial Day, the strong supply increase with weaker implied demand resulted in large refined product inventory increase.
Also, plans by the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) to increase output by 411,000 barrels per day in July also weighing on prices.
There were also expectations that OPEC member Iran would reject a US nuclear deal proposal key to easing sanctions.
Other trade tensions continue to pull on prices as President Donald Trump accused China of violating a deal to roll back tariffs and trade curbs.
Meanwhile, the US President and Chinese leader Xi Jinping are likely to speak this week.
Russian President Vladimir Putin also told President Trump that he must respond to high-profile Ukrainian drone attacks on Russia’s nuclear-capable bomber fleet and a deadly bridge bombing from Ukraine.
Meanwhile, production operations in Canada restarted on Wednesday after wildfires led to shut ins.
Wildfires in Canada had reduced the country’s output by some 344,000 barrels per day.