Oil price falls on US crude inventory build

Oil prices fell on Thursday in Asia as reports showed a surprise build in US crude inventories last week.

US Crude Oil WTI Futures were down 0.6% to $61.03 by 1:18 AM ET (05:18 GMT). International Brent Oil Futures dropped 0.7% to $70.48.

Crude prices fell as much as 3% on Wednesday after data from the US Energy Information Administration (EIA) showed that crude inventories rose by 4.7 million barrels last week, versus expectations for a decline of nearly 600,000 barrels.

Just a week ago, crude inventories had risen by 5.4 million barrels.

Gasoline and distillate inventories also rose last week, the EIA data showed, suggesting that demand from consumers was also weak.

“Rising inventories and a slowdown with refined product demand could suggest we could see further pressure (on prices),” said Edward Moya, senior analyst at futures brokerage OANDA, in a Reuters report.

Analysts said losses in oil prices were limited by ongoing tension between the US and Iran, as well as supply cuts led by the Organization of the Petroleum Exporting Countries since the beginning of the year.

Developments related to the Sino-US trade dispute are also closely monitored. Hopes of a trade deal between the U.S. and China happening in the near future diminished after US Treasury Secretary Steven Mnuchin told CNBC in an interview that a trip to Beijing to resume trade negotiations has not been scheduled yet.

Meanwhile, the South China Morning Post reported that recent restrictions imposed on Huawei have led China to rethink its economic relationship with the US.