Oil drops as rise in U.S. crude stockpiles offset worries for supply glut

Oil prices slid on Wednesday after a bigger-than-expected rise in U.S crude inventories offset worries for weak fuel demand and a possible supply glut. However, hopes that OPEC+ will maintain its output cuts in January capped losses.

Brent crude futures for January contract fell 0.3%, or 14 cents, at $43.61 per barrel, following a 0.2% loss on Tuesday. U.S. West Texas Intermediate crude for December delivery lost 0.6%, or 25 cents, at $41.18 per barrel after gaining 0.2% on Tuesday.

U.S. crude stockpile climbed by 4.2 million barrels last week, significantly bigger than analysts’ expectations for a 1.7 million-barrel build.

Saudi Arabia called on other members of OPEC+ to be flexible in their responses to the market’s needs as the group braces for tighter output policy in 2021.

OPEC and its allies including Russia are considering postponing the planned 2 million bpd increase in global output to support oil prices amid the coronavirus pandemic.