Oil price drops after data shows unexpected jump in US inventories

Glen
Crabtree, a floor hand for Raven Drilling, lubricates a pipe
while drilling for oil in the Bakken shale formation on July 23,
2013 outside Watford City, North Dakota
Andrew Burton/Getty

Oil prices slumped Wednesday, extending losses after
their worst month in two years, after data showed US crude
inventories rose unexpectedly.

West Texas Intermediate dropped 1.2% to $67.60 per barrel at
10:35 a.m. ET. Brent, the international benchmark, was down 1.7%
to $72.99 a barrel.

US commercial crude inventories jumped by 3.8 million barrels to
in the week ending July 27, the Energy Information
Administration said.

Analysts had expected a drawdown of between 2.5 and 3 million
barrels last week, according to Reuters. Unofficial estimates
from the American Petroleum Institute, a group that represents
oil and gas producers, on Tuesday showed a crude inventory build
of 5.59 million barrels.

“Oil prices have extended losses today after an unexpected build
in US crude stockpiles encouraged sellers to attack the
commodity,” said FXTM analyst Lukman Otunuga in an email.
“Could the party be coming to an end for bulls?”

Crude prices saw the biggest monthly declines in two years in
July, shedding about 7% after the Organisation of Petroleum
Exporting Countries (OPEC) and other supply-cutting countries led
by Russia agreed to
roll back coordinated production constraints that had been
bolstering prices since last year.

The cartel ramped up production to the highest level of 2018 last
month, according to
a Reuters survey out Monday, with an output boost of about 70
million barrels per day. 

WTI is up about 40% year-over-year. 

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