Oil slumps 4% on U.S. inventory build, equity rally caps losses

Oil prices fall after surprise build in U.S. inventories

Oil prices on Thursday hovered around their lowest levels since January as markets remain under pressure from rising USA supply and stalling demand amid an economic slowdown.

Brent futures were down $1.77, or 2.9 percent at $60.20 a barrel by about 3 p.m. GMT, having briefly traded in positive territory early in the session.

The US Energy Information Administration reported a 6.8 million barrel increase in crude inventories in the week to May 31, taking stocks to their highest level since July 2017.

Both Brent and USA crude are in bear-market territory, having lost more than 20% from peaks reached in late April.

The Middle East-dominated producer club of the Organization of the Petroleum Exporting Countries (OPEC) as well as some non-affiliated producers including Russian Federation, known as OPEC+, have been withholding oil supply since the start of the year to prop up the market.

At 483.3 million barrels, the EIA said, crude oil inventories were some five per cent above the seasonal average.

Earlier, production at Kashagan was around 330,000 to 340,000 barrel per day.

Oil prices resumed their slide on Wednesday, with West Texas Intermediate crude futures (WTI) dropping more than 4 percent after United States crude inventories unexpectedly surged.

Navy joins search operation for missing AN-32 aircraft
The Indian Space Research Organisation's satellites such as RISAT - Radar Imaging Satellite - had also been roped in to help. He said: "Some reports of possible location of crash site were received but no wreckage has been sighted so far".

The so-called OPEC+ alliance has been withholding supply since the start of the year in order to drain oversupply and prop up prices.

Signs of slowing global economic activity have increased in recent months, fuelled by trade tensions between the United States and China, the world's top two energy consumers. A breakdown in trade talks between the USA and China and threats of new American tariffs against Mexico have stoked fears about a world economy that's already showing signs of weakness.

At the Multi Commodity Exchange, crude oil contracts for June delivery traded higher by Rs 139, or 3.88 per cent, at Rs 3,721 per barrel in 20,580 lots.

Meanwhile, weekly US oil production ticked up to an all-time high 12.4 million bpd, according to a preliminary reading from EIA. The comments reinforce the likelihood that OPEC+ will roll over the production cuts when they meet in Vienna in a few weeks, extending the supply agreement for the rest of the year.

Morgan Stanley lowered its forecast for growth in oil demand for 2019 from 1.2 million bpd to 1.0 million bpd, and cut its Brent price forecast for the second half of 2019 to $65-$70 per barrel, from $75-$80.

Weak growth is also putting pressure on the outlook for demand.

The oil market has been weighed down by concerns about slowing global growth due to the U.S.

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