By Laila Kearney
NEW YORK (Reuters) - Oil prices sank more than 2% on Wednesday, weakened by another unexpected rise in U.S. crude inventories and by a dimming outlook for global oil demand.
Brent crude futures, the international benchmark for oil prices, fell $1.33, or 2.1%, to $60.96 a barrel by 1:09 p.m. EDT (1709 GMT). U.S. West Texas Intermediate crude futures were down $1.42, or 2.7%, to $51.85 a barrel.
Oil futures extended their losses after the U.S. Energy Information Administration (EIA) reported domestic crude stockpiles rose unexpectedly for the second week in a row, climbing 2.2 million barrels last week after analysts had forecast a decrease of 481,000 barrels. [nL2N23J0MI]
At 485.5 million barrels, U.S. commercial stocks were at their highest since July 2017 and about 8% above the five-year average for this time of year, the EIA said.
"The fact that this surplus has been mounting during the past couple of months despite a near record pace of exports in recent weeks is not only suggesting weak demand from the refiners but also a much stronger pace of imports than we had anticipated," Jim Ritterbusch of Ritterbusch and Associates said in a note.
The EIA on Tuesday cut its forecasts for 2019 world oil demand growth, which also pressured oil futures.
Trade tensions between the United States and China, the world's two biggest oil consumers, also weighed on prices.
U.S. President Donald Trump on Wednesday said he had a feeling that a trade deal could be reached, while again threatening to increase tariffs on Chinese goods if they do not make a deal.
Hedge fund managers are liquidating bullish oil positions at the fastest rate since the fourth quarter of 2018 due to increasing fears about the health of the global economy.
Goldman Sachs said an uncertain macroeconomic outlook and volatile oil production from Iran and others could lead OPEC to roll over supply cuts.
With the next meeting of the Organization of the Petroleum Exporting Countries set for the end of June, the market is looking to whether the world's major oil producers will prolong their supply cuts.
OPEC countries and non-member producers including Russia, have limited their oil output by 1.2 million barrels per day this year to prop up prices.
The energy minister of the United Arab Emirates, Suhail bin Mohammed al-Mazroui, said on Tuesday that OPEC members were close to reaching an agreement on continuing production cuts.
Algeria has floated an idea of increasing an oil supply cut by OPEC and its allies in the second half of 2019 as demand falters, OPEC sources said, although rolling over current output curbs is still the most likely scenario.
(Additional reporting by Julie Payne in London and Scott DiSavino in New York; Editing by David Gregorio and Marguerita Choy)
This story has not been edited by Firstpost staff and is generated by auto-feed.
Updated Date: Jun 13, 2019 00:05:57 IST