Oil prices drop for fifth straight day after US inventories rise

Oil prices dropped for a fifth straight day on Thursday after official data showed a sustained rise in U.S. crude and fuel inventories, while the ever-present pandemic clouded the demand outlook.

Brent crude was down 37 cents, or 0.5%, at $67.63 a barrel by 0535 GMT after dropping 0.6% on Wednesday. U.S. oil was also down 32 cents, or 0.5%, at $64.28 a barrel, having fallen 0.3% the previous session.

Government data on Wednesday showed U.S. crude inventories have risen for four straight weeks after refineries in the south were forced to shut due to severe cold weather. An industry report estimating a decline had raised hopes the run of gains might have stopped.

 

U.S. crude inventories increased by 2.4 million barrels last week, the U.S. Energy Information Administration (EIA) said on Wednesday. That was a day after the American Petroleum Institute (API) on Tuesday estimated a 1 million barrel-decline.

Stocks of gasoline and diesel increased against expectations among analysts for a decline.

"U.S. inventory numbers from the EIA were more bearish than the API numbers from the previous day suggested," ING Economics said, noting the stocks totalled more than 500 million barrels for the first time this year.

"Refiners continue to bring back capacity after the freezing conditions in February," ING said, adding that throughput rates are still below the average before the cold snap.

On the demand front, a slowdown in some inoculation programmes and the prospect of more restrictions to control the coronavirus tempered expectations for a recovery in fuel use.

A number of European countries have halted use of AstraZeneca's COVID-19 vaccine because of concerns about possible side effects.

Germany is also seeing a rise in coronavirus cases, while Italy plans a national lockdown for Easter lockdown and France will introduce tougher restrictions.