Oil prices fell more than $3 on Thursday after higher U.S. gasoline stockpiles stoked demand worries and returning energy supply from Libya and Russia eased supply concerns.
Brent crude futures dropped $3.80, or 3.6%, to $103.12 a barrel after slipping 0.4% in the previous session. U.S. West Texas Intermediate crude futures fell $3.93, or 3.9%, to $95.95 a barrel following a 1.9% drop on Wednesday.
Oil futures trading volumes have been thin and prices volatile as traders have to square tighter supply because of the loss of Russian barrels following the country’s invasion of Ukraine, with recessionary worries about weaker energy demand.
The European Central Bank is set to join other central banks in hiking rates, focusing on fighting runaway inflation rather than the economic downturn, which, in turn, can weigh on oil demand. An announcement is due at 1215 GMT.
European stocks, which often move in tandem with oil prices, also dipped ahead of the rate decision.
U.S. gasoline inventories rose 3.5 million barrels last week, government data showed on Wednesday, far exceeding analysts’ forecasts.
“U.S. gasoline demand is struggling to shift into top gear during the peak summer driving season,” said PVM analyst Stephen Brennock.
Meanwhile, Libya’s National Oil Corp (NOC) said on Wednesday crude production had resumed at several oilfields, after lifting force majeure on oil exports last week.
On the natural gas front, Gazprom resumed flows via the Nord Stream 1 pipeline which supplies more than a third of Russian gas exports to the European Union.
Still, one of Canada’s major oil export arteries, the Keystone pipeline, was operating at reduced rates for a third day on Wednesday, operator TC Energy said.