Oil prices slid on Wednesday, imperiling a five-session winning streak, as oversupply concerns outweighed optimism over economies reopening.
Some of the declines eased, however, after data from the U.S. Energy Information Administration showed a smaller-than-expected inventory build over the last week.
West Texas Intermediate, the U.S. benchmark, shed 3.5%, or 85 cents, to trade at $23.71 per barrel. In a volatile session, the contract swung between a gain of more than 6% at the high — climbing to $26.08 — and a more than 8% loss, hitting a session low of $22.58 per barrel. On Tuesday the contract soared 20.45%.
Brent crude, the international benchmark, traded 95 cents lower at $30.02 per barrel, as the coronavirus pandemic continues to hit demand.
EIA released Wednesday showed that for the week ending May 1 inventories rose by 4.6 million barrels, which was smaller than the 8.67-million-barrel build analysts had been expecting.
An improving demand outlook spurred recent optimism, with prices also supported by producers announcing scale backs in operations. The historic cut from the Organization of the Petroleum Exporting Countries and its oil-producing allies, which takes 9.7 million barrels per day offline, went into effect on May 1. Norway and Canada have also curbed production.
In the U.S., EIA data showed that weekly production averaged 12.1 million barrels per day for the week ending April 24, roughly 1 million barrels per day below the all-time high levels from March. Exxon (NYSE:XOM), Chevron (NYSE:CVX) and ConocoPhillips (NYSE:COP) are among the companies that have cut production in the face of depressed prices.
