NEW YORK: Oil prices fell again on Thursday, after the US government reported weak fuel demand in the country and a surprise jump in gasoline and distillate fuel stockpiles.
Brent crude futures fell by $1.71, or 2.1%, to $81.89 a barrel by 1:39 p.m. EDT (1739 GMT). US West Texas Intermediate crude futures were $1.51, or 1.9%, lower at $77.72 a barrel.
Both benchmarks were headed for monthly losses, with Brent on track to decline more than 6% from last month, while WTI was set to fall about 5%.
US crude stocks fell more than expected last week as refiners ramped up to their highest utilization rates in over nine months, data from the US Energy Information Administration showed.
However, there was a surprise jump in gasoline and distillate fuel inventories as demand weakened even as output rose. “Weakness in gasoline markets have continued to drag down the rest of the oil complex,” Alex Hodes, oil analyst at brokerage StoneX, wrote on Thursday.
Analysts had expected the US Memorial Day holiday on May 27, the start of the US summer driving season, would boost fuel demand. Yet EIA’s measure of gasoline demand slipped about 2% from the prior week to 9.15 million barrels per day.
“I was looking for a draw in gasoline, in particular, ahead of the holiday weekend but when refiners are cranking it out, that is too much to drain product inventories,” said John Kilduff, partner at Again Capital. “The gasoline demand is still a good number, even though I would have expected that to be up closer to 9.5 (million bpd) going into the last holiday weekend,” he said. US gasoline futures fell 2.6% to a 3-month low of $2.40 a gallon, while ultra-low sulfur diesel futures hit an over 11 month low.
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