Brent Crude was down $2.29, or 5.5%, to $40.29 a barrel, a day after hitting its highest levels since early March, just before the pandemic and Saudi-Russia price war hit the markets. WTI Crude settled $2.36, or 5.85%, lower at $38.01 per barrel.
U.S. crude oil inventories swelled last week by 1.4 million barrels, exceeding analysts’ expectations in a Reuters poll for a 299,000-barrel rise, the Energy Information Administration said, citing rising production. That marked the third straight record for crude in U.S. storage. “The thing I was most concerned about was the rebound in domestic production and it was up – as a standalone it was capable of doing some damage to the market,” said Bob Yawger, director of energy futures at Mizuho.
The International Monetary Fund said the coronavirus is causing wider and deeper damage to economic activity than first thought, and it slashed its 2020 global output forecasts further. India’s oil imports in May hit the lowest since October 2011 as refiners with brimming crude inventories cut purchases. China, the world’s top crude importer, is also expected to slow imports in the third quarter, after record purchases in recent months.