The price of Brent crude fell sharply today on news that US inventories had surged last week, against analyst predictions.
The international standard was down 3.1 per cent to $60.10 at around 5.30 this afternoon, after rebounding from an earlier low of $59.50.
Investors were spooked after the US today revealed oil stockpiles unexpectedly grew last week.
Inventories of crude oil jumped by 6.8m barrels, while analysts expected a 849,000 barrel fall, according to Reuters.
“The … gains came despite strong demand for crude oil from refiners and gasoline from drivers,” said John Kilduff, a partner at Again Capital.
“The timing couldn’t be much worse,” said Fiona Cincotta, a senior analyst at City Index.
Oil prices have dipped in recent weeks as worries escalate over trade between the US and China. It followed months of price hikes after Opec export cuts squeezed supply. Brent peaked at over $73 in April.
“The overriding concern here is that inventories are swelling just as Trump’s trade war on multiple fronts threatens future demand,” Cincotta said.
Today’s new ended a slight rebound yesterday as improving stock markets sent Brent up by 1.1 per cent.
Falling prices today prompted supermarket chain Asda to reduce its petrol prices by 3p. It comes after four months of consecutive price hikes at forecourts across the UK.