Oil prices tumbled in early trade on Wednesday, Reuters reported, citing industry data that shows a big build in US crude inventories, rather than the decline forecast by analysts, reinforcing fears about weakening demand even as supply tightens.
Brent crude futures dropped 38 cents, or 0.5%, at $80.30 per barrel.
U.S. crude inventories rose by about 7.8 million barrels last week, according to market sources citing data from the American Petroleum Institute, while analysts polled by Reuters had expected a 3.6 million barrel drop in stocks.
Product stocks also jumped, with gasoline inventories up by about 900,000 barrels and distillate stocks up by 3.4 million barrels, API data showed.
The rise in gasoline stocks was smaller than analysts had expected, but the build in distillate stocks, which include heating oil and jet fuel, was more than expected.
The inventory data defied bullish sentiment which sent the market up 3% in the previous session on hopes of a revival in Chinese demand with the easing of COVID-19 restrictions and on a weakening dollar after data showed US inflation subsiding.
