LONDON: Brent crude fell below $104 a barrel yesterday as rising fuel supplies and faltering demand pointed to a growing surplus of oil worldwide.
US crude oil inventories jumped to a fresh record last week as domestic production continued to climb, the US Energy Information Administration (EIA) said on Wednesday. The EIA forecasts global oil markets will be well supplied this year and next due to slowing demand and rapid increases in output, particularly from the US.
World stock markets also cast a shadow over sentiment, falling back from record highs after China’s annual consumer inflation rose by more than expected in April while factory prices fell for a 14th consecutive month.
Data showing the number of Americans filing new claims for unemployment benefits dropped to its lowest level in nearly 5-1/2 years offered little support. Brent crude for June fell 60 cents to $103.74 per barrel by 1340 GMT. The benchmark has slipped from a one-month high of $105.94 touched on Tuesday after Israeli air strikes on Syria stoked supply fears. US oil lost 60 cents to $96.02.
“Oil supply is improving and demand growth is not as rapid as expected,” said Abhishek Deshpande, oil analyst at French bank Natixis. Saudi Arabia increased crude oil output by 160,000 barrels per day (bpd) to 9.3 million bpd in April, industry sources said this week, adding to an already well-supplied global market. Reuters
