Investing.com – U.S. crude oil inventories unexpectedly rose last week, marking a second-consecutive week of surprise builds, according to official data released Wednesday.
The Energy Information Administration said in its regular weekly report that increased by 1.58 million barrels in the week to Aug. 9.
That was compared to forecasts for a stockpile drawdown of 2.78 million barrels, after a gain of 2.39 million barrels in the previous week.
The EIA report also showed that decreased by 1.41 million barrels, compared to expectations for a build of 0.03 million barrels, while fell by 1.94 million barrels, compared to forecasts for a gain of 0.99 million.
slumped 3% to $55.38 a barrel by 10:35 AM ET (14:35 GMT), compared with $55.20 prior to the publication.
London-traded sank 2.8% to $59.59 a barrel, compared with $59.27 ahead of the release.
Oil had already been falling ahead of the release, following a similar reading on stockpiles from the American Petroleum Institute, while weak economic data released overnight, along with an inversion of the yield curve in the U.S., stoked concerns over a global recession that would reduce demand for oil.
Data released earlier showed that Chinese industrial output growth hit its lowest level in 17 years, while the German economy contracted in the second quarter. Analysts signaled both data points as signs of the negative impact from trade conflicts, especially the U.S.-China dispute.
The yield on the U.S. 10-year Treasury note fell below that of the 2-year, inverting the curve for the first time since 2007. Some economists consider the yield curve inversion to be an early indicator of a recession.
Aside from Wednesday’s slide, oil has been dogged by volatililty month as crude reacts to trade and economic news.
“Oil prices are experiencing some of their greatest volatility ever as the U.S.-China trade war yanks crude around like a yo-yo,” Investing.com senior commodity analyst Barani Krishnan said, suggesting that the current “rollercoaster ride” may be far from over.
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