Global oil benchmark, Brent crude, fell by five per cent to a two-month low on Thursday after the United States government reported a weekly crude draw within analysts’ forecasts, disappointing market bulls who had expected larger declines.
Brent, against which half of the world’s oil is priced, was down by $2.35 to $46.45 per barrel as of 7:35pm Nigerian time. The session low was $46.27, the lowest since May 11, according to Reuters.
US West Texas Intermediate crude fell by $2.28 to $45.15 per barrel. It earlier hit a two-month low at $44.87.
The Energy Information Administration, the statistical arm of the US Energy Department, said crude stockpiles fell by 2.2 million barrels for the week ended July 1, drawing for a seventh week in a row.
But the EIA’s figure came in just below the decline of 2.3 million barrels forecast by analysts in a Reuters poll, but far less than the 6.7 million-barrel draw reported by trade group, the American Petroleum Institute, late on Wednesday.
“Expectations were high for this report, and they were dashed,” said a partner at New York energy hedge fund, Again Capital, John Kilduff.
Oil prices have risen by more than 70 per cent from 12-year lows of around $27 for Brent and $26 for US crude in the first quarter, driven by unexpected crude supply outages from Nigeria to Canada.
Fears of economic turmoil after Britain’s exit from the European Union are among factors hanging over global markets. German industrial output plunged unexpectedly in May for its steepest monthly drop since August 2014.