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Oil sinks more than 3.5% on shock US gasoline stocks build

Crude inventories decreased by 1.7 million barrels

Reuters  |  New York 

oil, crude, brent

sank more than 3 per cent to their lowest in more than five weeks on Wednesday following data showing an unexpectedly large weekly build in inventories and Energy Agency (IEA)data projecting a big increase in non-output in 2018.

The increase in inventories drove down futures by more than 4 per cent, tugging Brent and crude futures lower with them, analysts said.

"The industry continues to turn a surplus into a and distillate product surplus," Andrew Lipow, president of Lipow Oil Associates in Houston said.

After rising for three consecutive days, Brent futures were down $1.81, or 3.7 per cent, at $46.91 by 12:44 pm. West Texas Intermediate crude was down $1.75, or 3.8 per cent, at $44.71 per barrel. Both contracts hit their lowest since May 5, driving them into technically oversold territory.

The Energy Information Administration (EIA) said inventories increased by 2.1 million barrels during the week ended June 9, while crude inventories decreased by 1.7 million barrels.

That compares with analysts estimates in a Reuters poll for a 0.5 million barrel draw in stocks and a 2.7 million barrel draw in crude inventories.