Crude oil prices dropped on Wednesday, extending losses to a third straight session, after data showed a surprise surge in U.S. crude inventories, and amid hopes of some progress in Russia-Ukraine peace talks.
West Texas Intermediate Crude oil futures for April ended lower by $1.40 or about 1.5% at $95.04 a barrel.
Brent crude futures were down $1.74 or about 1.7% at $94.70 a barrel a little while ago.
Data released by U.S. Energy Information Administration (EIA) showed crude oil inventories in the U.S. rose by 4.345 million barrels last week, as against expectations for a draw of 1.375 million barrels.
The EIA data also showed that distillate stock piles increased by 0.332 million barrels in the week, compared to expectations for a drop of 1.826 million barrels, while gasoline inventories dropped by 3.616 million barrels, more than twice the expected decline of 1.579 million barrels.
A downward revision in oil demand forecast by the International Energy Agency (IEA) weighed as well on oil prices. The IEA lowered its forecast for world oil demand for the second to fourth quarters of 2022 by 1.3 million bpd noting rising commodity prices and sanctions on Russia “are expected to appreciably depress global economic growth” and impact inflation.
In updates on peace talks, Ukrainian President Volodymyr Zelenskyy said during an address to the nation that the positions in the negotiations were beginning to “sound more realistic,” while Russian Foreign Minister Sergey Lavrov told the BBC there was “some hope of reaching a compromise.”