Prices of Brent crude and WTI slipped again on Wednesday as higher than required US inventories shifted investors attention towards the risk of oversupply amid low fuel demand backed by the coronavirus caused Covid-19.
At the time of reporting, the June WTI crude was at $24.35 per barrel lower by 0.86 per cent or 21 cents from its previous close.
Brent crude oil also has declined on the Intercontinental Exchange (ICE) is at $30.83 per barrel, lower by 0.45 per cent or 0.14 cents from its previous close.
As per data from the American Petroleum Institute (API), US crude inventories rose more than the initial expectations, hitting the mark of 8.4 million barrels last week.
This latest fall comes at a time when the oil price started to show some improvements after the European and Asian countries initiated their process of lifting lockdowns, which was imposed to curb the spread of coronavirus.
The decline continues even after the Organization of Petroleum Exporting Countries (OPEC) and its allies agreed to cut their outputs. Initially, there were hopes that agreement would stabilise oil prices, but with the Covid-19 pandemic continuing, the gap between the supply and demand has increased vastly and is not allowing oil prices to rise.
Analysts say we have a long way to meet the normal supply, demand situation.
A Reuters report quoted Chris Midgley, Global Director of Analytics of S&P Global Platts as saying that the global inventories are still expected to reach potential storage limits by June.
At the moment, traders are eagerly waiting for the Energy Information Administration to present the inventory data, scheduled later in the day.