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Oil drops as US stockpiles fall less than expected
[NEW YORK] Oil prices fell on Wednesday for the fifth time in a row as US crude stockpiles shrank less than expected, adding to concerns about demand in a tepid global economy.
The Department of Energy's weekly petroleum report showed commercial crude inventories fell by 900,000 barrels in the week ending June 10 to a still-high 531.5 million barrels. Experts polled by Bloomberg had forecast a much larger drop of 2.33 million barrels.
"It's a pretty bearish supply situation that we have," said Bob Yawger of Mizuho Securities USA.
US benchmark West Texas Intermediate (WTI) for July delivery fell 48 cents to US$48.01 a barrel on the New York Mercantile Exchange.
In London, Brent North Sea crude for delivery in August finished at US$48.97 a barrel, down 86 cents from Tuesday's settlement.
Prices spiked higher after the DoE report before falling back as traders weighed the implications and worried about soft demand.
"At the end of the day we have a lot of crude oil, gasoline and heating oil still laying around," Mr Yawger said.
After almost doubling from February to multi-month highs last week above US$50 a barrel, oil prices have come under selling pressure this week, due to worries about the global economic outlook and Britain's vote next week on quitting the European Union.
In addition, the International Energy Agency warned Tuesday that while it expects global crude demand to grow this year and next, huge inventories would cap future price gains.