U.S. crude inventories record hit U.S. oil

On Thursday, assailed by another record build-up in U.S. crude inventories, oil prices fell. Also contributing to its dip is the projection made by the U.S. Federal Reserve that the world’s largest economy would see a shrink of 6.5%.

Wednesday’s gains had been offset by Brent crude futures’ fall of 3.6%, or $1.50, to $40.23 a barrel by 0802 GMT. On the other hand, U.S. West Texas Intermediate (WTI) crude fell by 4%, or $1.57, making it $38.03 per barrel.

As the demand risks sees resurgence, both benchmarks are seemingly poised for their most daunting daily drop in two weeks.

Unexpectedly, U.S. crude inventories went up by 5.7 million barrels in the week to June 5, bringing it to a total of 538.1 million barrels. This is a record rise according to the Energy Information Administration (EIA) data owing it to imports being boosted through the arrival of supplies that were purchased by refiners when the market was flooded by Saudi Arabia in March and April.

The data also displayed gasoline stockpiles growing more than expected to 258.7 million barrels. Distillate stockpiles went up by 1.6 million barrels. It had beeen noted however that the increase was smaller compared to what was recorded in the weeks that went before.

prices were further pressured upon the U.S. Federal Reserve’s statement that U.S. unemployment was set to reach 9.3% at 2020’s end. The Fed added that years would pass for it to fall back. Meanwhile, interest rates are expected to stay near zero through the following year.

On Wednesday, the total coronavirus cases in the U.S. topped 2 million as new infections had been reported rising slightly a decline in count in the past 5 weeks.