U.S. West Texas Intermediate (WTI) crude futures fell 27 cents, or 0.5%, to $53.04 a barrel at 0147 GMT, following two days of gains on hopes of massive COVID-19 relief spending under new U.S. President Joe Biden.
Brent crude futures similarly dropped 26 cents, or 0.5%, to $55.82 a barrel.
U.S. crude oil inventories rose 2.6 million barrels in the week to Jan. 15, according to data from the American Petroleum Institute, an industry group, compared with analysts’ forecasts in a Reuters poll for a fall of 1.2 million barrels.
“Oil prices look a tad vulnerable to potential profit-taking after U.S. crude stockpiles bearishly rose 2.56 million against consensus draw,” Axi chief market strategist Stephen Innes said in a note to clients.
However gasoline stocks and distillate inventories, which include diesel, distillate and jet fuel, rose by less than analysts had expected.
The U.S. Energy Information Administration is due to release its weekly inventory report on Friday.
Axi’s Innes said COVID restrictions on mobility were hurting the near-term outlook for oil demand, though traders had been looking beyond that on the hopes that vaccine rollouts would ease lockdowns.
“Simultaneously, the near-term China crude demand forecast looks high and susceptible to revision lower as lockdowns spread in the country ahead of the Lunar New Year,” he said.
The Biden administration has committed to curb carbon emissions and among his first actions as president, Biden announced America’s return to the Paris climate accord and revoked a permit for the Keystone XL oil pipeline project from Canada.
The administration is also committed to ending new oil and gas leasing on federal lands, Biden’s press secretary said, although Biden has not laid out a timeline for achieving that goal.
