Brent crude futures for May declined 74 cents, or 0.9%, to $85.51 a barrel
Oil prices dropped for a second day on Wednesday after a report that crude stockpiles in the U.S., the world’s biggest oil user, soared and on signs major producers are unlikely to change their output policy at a technical meeting next week.
Brent crude futures for May declined 74 cents, or 0.9%, to $85.51 a barrel at 0420 GMT. The May contract is set to expire on Thursday and the more actively traded June contract dropped 68 cents, or 0.8%, at $84.95.
U.S. West Texas Intermediate (WTI) crude futures for May delivery dropped 64 cents, or 0.8%, at $80.98.
Prices have pulled back this week since jumping to their highest since October last week and remain around 3% above the average closing price in the first week of March.
A sharp rise in U.S. crude inventories and expectations for a potential inaction by OPEC+ in its output policy next week saw further unwinding in oil prices in today’s session, as profit-taking accelerates following a strong rally in mid-March, said Jun Rong Yeap, a market strategist at IG in Singapore.
U.S. crude oil inventories increased 9.3 million barrels in the week ended March 22, per market sources citing API figures on Tuesday. Distillate inventories also increased 531,000 barrels.
Gasoline stocks however dropped 4.4 million barrels.
The Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, also known as OPEC+, is unlikely to make any oil output policy changes until a full ministerial gathering in June, three OPEC+ sources told Reuters ahead of a meeting next week.
The group will hold an online meeting of its Joint Ministerial Monitoring Committee on April 3 to review the market and members’ implementation of output cuts.
Earlier this month, OPEC+ members agreed to extend their output cuts of around 2.2 million bpd to the end of June.
