Oil fell for a second day after an unexpected jump in U.S. crude stockpiles unnerved a market already anxious about faltering global demand.
Futures in New York dropped as much as 1.3 percent, after falling by 0.9 percent at the close on Wednesday. American oil inventories grew by 2.8 million barrels last week, government data showed, compared with analyst estimates for a draw of 2.5 million barrels. The dollar also advanced, adding another headwind to crude prices.
Oil prices have risen about 30 percent this quarter as the Organization of the Petroleum Exporting Countries and its allies embarked on a mission to curtail global output, while American sanctions on Iran and Venezuela have also been supportive. Demand is less certain, with U.S. and European indicators pointing to slowing economies and Washington and Beijing resuming high-level talks this week in a bid to defuse their trade war.
Oil prices are lower “probably in response to yesterday’s U.S. inventory data,” Commerzbank analysts including Carsten Fritsch wrote in a report.
West Texas Intermediate for May delivery dropped 79 cents, or 1.33 percent, to $58.62 on the New York Mercantile Exchange as of 7:27 a.m. local time. It fell 53 cents on Wednesday.
Brent for May settlement, which expires Friday, fell 73 cents to $67.10 on the London-based ICE Futures Europe exchange. The contract has risen about 25 percent so far this quarter. The global benchmark crude was at a premium of $8.44 to WTI.
Nationwide inventories in the U.S. rose for the first time in three weeks to about 442.3 million barrels in the period ended March 22, according to Energy Information Administration data. Stockpiles at the Cushing, Oklahoma, oil storage hub increased by 541,000 barrels to 46.9 million.
The Bloomberg Dollar Spot Index rose 0.2 percent, while the global bond rally showed signs of easing on Thursday. Treasuries turned lower alongside most sovereign debt in Europe, as investors greeted the end of the first quarter in a far from jubilant mood.
Other oil-market news: After years in the shadow of the U.S. shale patch, deep-water explorers from Royal Dutch Shell Plc to Talos Energy Inc., along with contractors, told investors at a conference in New Orleans this week they see a revival coming. Saudi Aramco will buy a majority stake in local chemical giant Sabic from the kingdom’s sovereign wealth fund for $69.1 billion. Eleven days after Intercontinental Terminals Co.’s chemical tanks erupted in flames near Houston and spread panic across the fourth-biggest U.S. city, the company’s top executive made his first public appearance after drawing criticism from a top official. Crude futures for May delivery fell 1.2 percent to 453.2 yuan a barrel on the Shanghai International Energy Exchange.