Crude prices dropped near a seven-month low on Wednesday after U.S. inventory data failed to convince investors that the global oil supply glut is easing.
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The U.S. Energy Information Administration reported a smaller-than-expected decline in crude oil stockpiles last week, pushing prices below $45 a barrel and to the lowest levels since November.
Light, sweet crude for July delivery slid $1.57, or 3.4%, to $44.89 a barrel on the New York Mercantile Exchange, extending losses from earlier in the session. Prices are on track to close at the lowest since November 14. Brent, the global oil benchmark, fell $1.62, or 3.3%, to $47.10 a barrel.
According to the EIA, crude oil stockpiles decreased by 1.7 million barrels in the week ended June 9, falling short of expectations for a 2.6 million barrel drop from analysts and traders surveyed by The Wall Street Journal.
Meanwhile, stockpiles of oil products increased, with gasoline inventories rising by 2.1 million barrels and distillates building by 300,000 barrels last week. Analysts had forecast a 700,000 barrel decline in gasoline inventories and a 600,000 barrel rise in distillates.
The build in gasoline stockpiles "are pretty bearish for this time of year," said Donald Morton, senior vice president at Herbert J. Sims & Co. "The demand numbers basically have slipped."
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The latest numbers reinforced concerns that attempts by the Organization of the Petroleum Exporting Countries and a handful of external producers to drain excess supply has had little impact on the global glut. In May, OPEC and several other nations agreed to extend joint efforts to cut production by 1.8 million barrels a month until March 2018.
However, on Wednesday, the International Energy Agency said stored oil in industrialized nations -- a proxy for global supply -- rose by 18.6 million barrels in April. Inventories were 292 million barrels higher than the average over the past five years, said the agency, which advises governments on energy trends.
The IEA expects global oil demand to rise by 1.4 million barrels a day in 2018 -- but non-OPEC supply alone is set to edge up by 1.5 million barrels.
"That just adds fuel to the fire about the lack of efficacy of those production cuts," said Gene McGillian, research manager at Tradition Energy.
Gasoline futures fell 4.3% to $1.4359 a gallon and diesel futures fell 2.6% to $1.4111 a gallon.
--Summer Said contributed to this article.
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(END) Dow Jones Newswires
June 14, 2017 12:09 ET (16:09 GMT)