Oil prices plummet as US oil stocks hit fresh record high

Jessica Morris
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High Oil Prices Continue To Drive Gas Prices Steadily Upwards
US crude oil inventories are at historically high levels (Source: Getty)

Oil hit a fresh two-month low today, after US government data stoked fears that the market recovery is coming along slower than expected.

The US Energy Information Administration said US oil stocks swelled by 1.7m barrels in the week to 22 July, compared to analysts' expectations for a decrease of 2.3m barrels. Gasoline stocks rose by 452,000, dwarfing forecasts for a 40,000 barrel increase.

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Industry data from the American Petroleum Institute showed yesterday that US oil stocks fell by 827,000 barrels last week.

Oil markets have been spooked recently by a glut of oil products, which has has been exacerbated by disappointing demand during the US driving season. Crude has also come under pressure from the strong US dollar, as well as global growth concerns emanating from the UK's decision to leave the European Union.

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"At 521.1m barrels, US crude oil inventories are at historically high levels for this time of year," the EIA said.

Brent crude, the global benchmark, fell 1.76 per cent to $44.08 per barrel. Its US counterpart, West Texas Intermediate crude, slumped 1.33 per cent to $42.35, after rising as high as $43.20 earlier in the day.

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