Oil prices dropped for a second straight session as the cons of a slowing global demand outlook outweighed the pros of OPEC's agreement with associated producers at the end of last week to deepen crude output cuts in early 2020, Reuters reported.
Last week, Opec+, which includes most Opec producers along with 10 non-Opec producers led by Russian Federation, agreed to increase output cuts from 1.2 million barrels per day (Mmbpd), to 1.7 Mmbpd to support prices.
At 447.9 million barrels, crude stocks were about 4% above the five-year average for this time of year, the EIA said.
OIL prices fell on Wednesday after industry data showed an unexpected build-up in crude inventory in the United States and as investors waited for news on whether a fresh round of USA tariffs on Chinese goods would take effect on Sunday. American output has risen even as the drill count has fallen, reflecting more efficient well extraction. Analysts polled by S&P Global Platts forecast a decrease of 2.8 million barrels, though the API reported Tuesday that USA crude supplies rose by 1.4 million barrels last week.
Brent futures LCOc1 fell 48 cents to 63.86 dollars per barrel by 1220 GMT, set for their biggest daily fall since December 2.
The weak start to the week came despite data showing China's crude imports jumped to a record, revealing just how deep jitters are embedded in the market over the U.S.
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USA inventories of gasoline jumped 5.4 million barrels and distillates, which include diesel and heating oil, rose 4.1 million barrels - both more than double analysts' expectations.
Refinery utilization rates fell 1.3 percentage points last week to 90.6% of total capacity.
OPEC and its allies, on the other hand, had begun capping its supply since 2017, due to continuous increase in USA crude production, which soared from about 8.8 million BPD to a record 13 million BPD recently and is expected to rise further in 2020. Finished motor gasoline consumption fell to 8.8 million barrels per day (bpd), the lowest since February, according to EIA data. "China headlines have flung the oil market around this year", said Howie Lee, an economist at Oversea-Chinese Banking Corp. The agency lowered its projections for non-OPEC production growth in 2020 by about 200,000 bpd. Focus now shifts to trade ahead of a Sunday deadline for the imposition of US tariffs on Chinese goods.
The supply curbs reaffirmed the OPEC+ coalition's "continuing commitment to oil market stability", OPEC said in the report.
"The market seems to have stalled".