Oil closes 1.5% lower on demand concerns

Oil drilling rigs

Oil snapped its three-day winning streak to close lower today, May 10, after an unexpected rise in US oil inventories and concerns about a decline in demand.

Brent crude dropped $1.03, or 1.3%, to settle at $76.41 a barrel while West Texas Intermediate crude (WTI) fell $1.15, or 1.6%, to $72.56 a barrel.

US Energy Information Administration data revealed that oil stocks rose by 3 million barrels in the week ended May 5 – the first rise in four weeks. Stockpiles are currently up 9% compared to the same period last year.

Meanwhile, US banking crisis and slow economic growth also weighed on the prices.

Latest data showed that the annual inflation in the US reached 4.9% in April, contrary to expectations of stability at 5%.

Separately, Ministry of Energy data showed that Russia pumped about 9.67 million barrels per day during April, which means a decrease in production by 443,000 barrels per day compared to February, Bloomberg reported.

Russia is nearing its pledge to reduce crude production by 500,000 barrels per day until December, in response to Western sanctions.