Oil prices dipped in volatile trading on Thursday as concerns over global supply appeared to outweigh a build in U.S. fuel product inventories as OPEC+ decided stick to its measured output strategy.
U.S. West Texas Intermediate (WTI) crude futures slid $1.70, or 1.55%, to $107.83 a barrel.
Brent crude futures for August dropped $4.87, or 4.21% to $110.72 a barrel in light trading as the August contract is set to expire on Thursday. The more-active September contract was at $112.18, down 27 cents, or 0.2%.Both contracts slid about 2% on Wednesday after The Energy Information Administration (EIA) said U.S. crude inventories fell last week even as production hit its highest level since April 2020 during the first wave of the coronavirus pandemic.
Fuel stocks rose as refiners ramped up activity, operating at 95% of capacity, the highest for this time of year in four years.
A stronger dollar also pressured prices as it makes oil more expensive for buyers using other currencies.
Still prices found some support on worries on supply concerns.
Organization of the Petroleum Exporting Countries (OPEC) and OPEC+, which includes allies such as Russia, began two days of meetings on Wednesday with sources saying there was little prospect of pumping more oil.
Across the world in Ecuador, the spread of anti-government protests hurt oil output forcing a force majeure declaration on exports of Ecuador’s flagship Oriente crude.
Uncertainty in global oil and gas markets could stay for some time to come as spare capacity is very low while demand is still recovering, Shell PLC Chief Executive Officer Ben van Beurden said.