Oil prices dropped on Wednesday after the U.S. Energy Information Administration released data that showed oil supplies have been building.
West Texas Intermediate crude oil futures fell 2% shortly after the 10:30 a.m. release, to $61.89. Prices had been slightly down before that. Oil stocks were also falling, with explorer EOG (EOG) down 2.2% and Chevron stock (CVX) off by 0.2%.
Crude inventories rose by 4.7 million barrels above last week’s numbers. Analysts had been expecting inventories to fall by about 2 million barrels, according to S&P Global Platts. Inventories are about 4% above the five-year average for this time of year, the EIA reported. An unusual number of refineries have been down for maintenance, which may be adding to the glut of oil.
There’s been pressure on oil supplies around the world in recent weeks because of global turmoil. U.S. sanctions against Iran and Venezuela have reduced supplies from those countries, propping up oil prices. But any sign that supplies are growing is problematic, because traders are already worried about demand for oil. The U.S.-China trade war and slowing growth in some countries is hurting demand.
