Oil prices fell on Wednesday as data showed an increase in U.S. crude and fuel inventories, raising the prospect of oversupply as a potential second wave of the coronavirus pandemic threatened to halt any recovery of demand.
Brent crude futures were down 89 cents, or 2.2%, at $40.07 a barrel as of 0348 GMT, and U.S. West Texas Intermediate (WTI) futures fell $1.13, or 2.9%, to $37.25 a barrel.
Both benchmarks rose more than 3% on Tuesday, after the International Energy Agency raised its 2020 oil demand forecast to 91.7 million barrels per day (bpd) and U.S. retail sales posted a record jump in May.
The rise in U.S. crude and fuel inventories, however, stoked concerns about a surplus and pressured oil prices, as the number of coronavirus infections surpassed 8 million globally and several U.S. states saw their case numbers spike.
U.S. crude oil inventories rose by 3.9 million barrels in the week to June 12 to 543.2 million barrels, according to data from industry group the American Petroleum Institute, countering expectations for a fall of 152,000 barrels.
Gasoline stocks rose by 4.3 million barrels and distillate fuels, which include diesel and heating oil, rose 919,000 barrels.
Official data from the U.S. Department of Energy’s Energy Information Administration is due later on Wednesday.
An OPEC-led panel will meet on Thursday to further discuss ways to strengthen and review compliance with producers’ commitment to curb oil output.
Iraq reduced its oil exports by 8%, or 300,000 bpd, so far in June, indicating OPEC’s second-largest producer is stepping up efforts to adhere to its pledged cut.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies, collectively known as OPEC+, agreed to cut output by 9.7 million bpd – about 10% of pre-pandemic demand – to the end of July.