Oil prices sank on Thursday, adding to significant overnight losses, as a stronger U.S. dollar and a surprise rise in U.S. crude supply triggered selling.
The U.S. dollar soared to seven-week highs early in Thursday’s session after the minutes of the Federal Reserve’s latest policy meeting fanned hopes for a June interest rate increase.
Crude oil for June delivery in New York shed $1.03, or 2.14%, to trade lower at $47.18 a barrel by 9:50AM ET.
The U.S. Energy Information Administration said that crude oil inventories unexpectedly went up by roughly 1.31 million barrels last week, climbing to 541.3 million. Analysts expected stocks to fall to 2.833 million barrels
Despite recent losses, oil prices have overall been well-supported thanks to disruptions in Canada, Libya and Nigeria. In fact, Nymex oil has recovered 80% since plummeting to 13-year lows of $26.05 on February 11.
In London, Brent oil for July delivery gave up $1.12, or 2.25%, to trade lower at $47.83 a barrel.
Notwithstanding fresh losses, Brent futures have recovered by roughly 85% since dropping below the $30 a barrel threshold in the second week of February, despite the Doha summit ending in a stalemate. The stalled freeze initiative may be discussed again by OPEC in its upcoming meeting on June 2.
Meanwhile, Brent’s premium to the WTI crude contract closed at 65 cents, compared to Wednesday’s 74 cents.