Pushed by overall lessening demand for oil, its prices dipped by more than 1% on Wednesday. Meanwhile, US crude stock inventories reported a surprise increase in spite of reduced supply driven by the OPEC.

Brent crude futures, the international yardstick for oil prices, dipped 87 cents, or 1.4%, and stood at $61.42 a barrel on Wednesday. In addition, US West Texas Intermediate (WTI) crude futures declined 85 cents, or 1.6%, to stay at $52.41 per barrel. Also, a surprise gain in US crude stock helped keep the oil prices at a low. According to a note by the ANZ bank, “Investors have been concerned about the recent rise in stockpiles in the US”.

Data obtained from the American Petroleum Institute (API) on Tuesday revealed that during the week that ended on Friday, June 7, the country’s crude stock reported an increase by 4.9 million barrels to reach 482.8 million barrels. The figures were in striking contrast to analysts’ expectations of a decrease of 481,000 barrels of inventory.

Meanwhile, the US Energy Information Administration (EIA) released its monthly report on Tuesday. In view of the weakening growth in global oil demand and lowering prices, the organization has cut back its forecasts for international oil demand growth and US crude oil production for the year 2019.

The report stated that the EIA has reduced its annual forecast for global oil demand growth by 160,000 barrels per day (bpd) to 1.22 million bpd. Similarly, for the crude oil production too, the organization’s forecast has been lowered to 12.32 million bpd, which is 140,000 bpd lesser than that of May.

Analysts also opine that it is not just the increasing crude oil supply that is pushing down prices. The ongoing trade tensions between the US and China are also a major contributor to the problem.

According to Benjamin Lu, commodities analyst at Phillips Future, Singapore, “Oil prices have struggled to retain bullish gains as traders stay cautious over heightened geopolitical risks and persistent weakness in the global economic backdrop.”