Crude oil futures dropped on Wednesday after oil workers in Kuwait ended their 3-day strike, which had reduced production from the country, and reports displayed an increase in US stockpiles during the previous week.
Brent futures slumped by 68 cents at $43.35 per barrel at 0302 GMT. On Tuesday, Brent edged higher by 2.6 percent or $1.12, at $44.03 per barrel.
On the other hand, US crude futures dipped by 85 cents at $40.23. During the prior session, the contract climbed by 3.3 percent or $1.30, to hit $41.08.
Kuwaiti oil workers ended their 3-day strike, which had diminished the OPEC member’s oil production by almost half.
Kuwait Oil Company was forced to slash oil production to as little as 1.1 million barrels per day (bpd) from a normal level of approximately 3 million bpd. On Tuesday, the output had rebounded to about 1.5 million barrels per day.
The end of the 3-day strike triggered the bearish sentiment brought about by the oil producers’ failure to come to an agreement regarding a production freeze on Sunday.
According to the IHS analyst Mr. Victor Shum, "In the near term we are going to see more downward pressure than upward."
Contributing to the bearish mood is the data from the American Petroleum Institute, which also displayed that US crude stocks rallied more than expected during the previous week.
In the week to April 15, crude inventories surged by 3.1 million barrels to reach 539.5 million, in comparison with analysts’ forecasts for an increase of 2.4 million barrels. Meanwhile, the American Petroleum Institute stated that crude stocks at the Cushing, Oklahoma delivery hub dipped by 235,000 barrels.Publication source