Oil prices slipped on Wednesday after United States inventory data showed a surge in gasoline inventories due to weak fuel demand following US Memorial Day weekend, traditionally the beginning of the peak summer driving season.
Brent crude futures fell 23 cents, or 0.3 per cent, to $71.99 a barrel by 12:35 p.m. EDT (1635 GMT), having earlier touched $72.83, their highest since May 20, 2019.
US West Texas Intermediate (WTI) crude fell 43 cents, or 0.6 per cent to $69.62 a barrel, after reaching $70.62, its highest since Oct. 17, 2018. Despite a 5-million-barrel draw in crude oil last week, stocks of gasoline and other fuels rose sharply due to weak demand, according to energy information administration data for the week that included the long Memorial Day holiday weekend. Product supplied fell to 17.7 million barrels per day, versus 19.1 million the week before.
“This could be canary in a coal mine at peak economic activity having occurred, but it’s early days to conclude that,” said John Kilduff, partner at Again Capital LLC in New York. Other analysts noted, however, that the poor weather up and down the US East Coast may have reduced consumption, following a period of gasoline hoarding that artificially boosted demand during the colonial pipeline outage last month from a ransomware attack.