Investing.com-- Oil prices extended losses into Asian trade on Thursday after a bigger-than-expected weekly build in U.S. crude stockpiles, while signs of easing demand in China also weighed.
Crude prices had fallen about 1.5% in the prior session, cutting short a brief recovery as data pointed to increased U.S. inventories and production.
This was exacerbated by data which showed that Chinese refiners processed lower amounts of oil in October than the prior month. Other readings still pointed to some economic strength in the world’s largest oil importer, as industrial production grew more than expected.
Still, Wednesday’s losses saw oil prices largely reverse gains made earlier this week, as markets remained sour on demand despite positive forecasts from the International Energy Agency and the Organization of Petroleum Exporting Countries.
Weak GDP prints from Japan and the euro zone also cast doubts over crude demand, as economic conditions worsened across the globe.
Brent oil futures fell 0.5% to $80.11 a barrel, while West Texas Intermediate crude futures fell 0.7% to $76.11 a barrel by 20:41 ET (01:41 GMT). Both contracts were now trading 1% lower for the week, and were headed for their fourth consecutive week of losses.
Oil prices had fallen sharply over the past three weeks as traders priced in a lower risk premium from the Israel-Hamas war, while a swathe of weak economic readings from China also raised concerns over demand.
US inventories rise more than expected, production at record high
Government data showed that U.S. oil inventories rose 3.6 million barrels in the week to November 10, more than expectations for a build of nearly 1.8 million barrels.
Data also showed that U.S. production remained at record highs of 13.2 million barrels per day through the week, indicating that U.S. supplies remained fairly healthy.
Fuel demand in the country appeared to be steady, with both gasoline and distillate inventories seeing outsized draws during the week. But the pace of draws steadily declined in recent weeks, as fuel demand eased with the onset of the winter season.
Uncertainty over U.S. interest rates also weighed on oil markets, as the Federal Reserve warned that it could still hike rates further this year, although recent data showed a decline in inflation.
The dollar benefited from this uncertainty, which in turn dented oil prices.