Crude oil prices moved lower after the Energy Information Administration reported an inventory build of 8.2 million barrels for the week to July 1.
This compared with a draw of 2.8 million barrels for the previous week.
A day earlier, the API had estimated a crude oil inventory build of close to 4 million barrels, which contributed to a decline in oil prices, which had, however, started to reverse at the time of writing.
Brent had rebounded above $100 per barrel in pre-noon Asian trade on Thursday after dipping below the three-digit threshold for the first time in months earlier this week.
Later in the day, West Texas Intermediate also rebounded above $100, with both benchmarks gaining more than 4 percent as of the time of writing.
According to analysts, the price decline was a sign that traders were beginning to worry about demand destruction as the world moves into a recession. However, it appears that supply worry has prevailed.
In fuels, the EIA reported inventory declines for last week.
Gasoline inventories shed 2.5 million barrels, with production averaging 10.3 million barrels daily.
This compared with an inventory build of 2.6 million barrels for the previous week, with production averaging 9.5 million barrels daily.
In middle distillates, the authority estimated an inventory decline of 1.3 million barrels for the week to July first, with production averaging 5.4 million barrels daily.
This compared with an inventory increase of 2.6 million barrels for the previous reporting period, and production averaging 5.1 million barrels daily.
Brent crude has shed close to $20 over the past week, with WTI down by over $13 per barrel. The decline is being entirely attributed to worries about a recession rather than actual demand destruction resulting from excessively high prices.
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“If a recession materializes and inflation continues to push prices for almost everything higher, oil demand is almost certain to fall, bringing prices with it,” Louise Dickson from Rystad Energy told the New York Times this week.
By Irina Slav for Oilprice.com
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