Investing.com – WTI crude oil prices settled more than 2% lower despite a massive draw in U.S. crude supplies as domestic output continued to expand.
On the New York Mercantile Exchange crude futures for July delivery fell 1.7% to settle at $67.04 a barrel, while on London's Intercontinental Exchange, Brent fell 0.03% to trade at $77.70 a barrel.
Inventories of U.S. crude fell by 3.620 million barrels for the week ended May 25, confounding expectations for a draw of just 0.400 million barrels, according to data from the Energy Information Administration (EIA).
The drop in crude supplies came as crude imports plunge by 528,000 barrels per day last week. The massive draw in crude supplies was offset somewhat by rising product inventories as both gasoline and distillate stockpiles increased.
Gasoline inventories – one of the products that crude is refined into – rose by 0.534million barrels, missing expectations for a fall of 0.946 million barrels, while supplies of distillate – the class of fuels that includes diesel and heating oil – rose by 0.634 million barrels, missing expectations for a draw of 1.129 million barrels.
U.S. oil output continued its expansion rising 215,000 barrels per day to 10.47 million barrels per day in March, according to preliminary EIA data.
The slump in crude oil prices comes a day after snapping a seven-day losing streak following a report that OPEC and its allies would stick to the global production-cut agreement, raising expectations that oil markets would continue to rebalance.
OPEC in its most recent report said the production-cut agreement and falling output in Venezuela had helped slashed excess global oil supplies to just above the five-year average.
In November 2016, OPEC and other producers, including Russia agreed to cut output by 1.8 million barrels per day (bpd) to slash global inventories to the five year-average. The OPEC-led deal was renewed last year through 2018.