Oil Inventories Rise Unexpectedly by 3.8 Million Barrels, Raising Demand Fears

US crude oil inventories unexpectedly rose last week, defying expectations of a decline and adding weight to expectations of a contraction in energy demand amid growing recession fears.

Oil Inventories Rise Unexpectedly by 3.8 Million Barrels. US benchmark West Texas Intermediate fell $0.97 to a 12-week low, trading at $98.53 a barrel after the report. US crude oil inventories rose by about 3.8 million barrels in the week ended June 30. This compared with a decline of 3.8 million barrels reported by the API for the previous week. Economists were expecting a decline of about 1.1 million barrels. API data also showed that gasoline stocks fell by 1.8 million barrels last week, while distillate stocks fell by about 635,000 barrels. Bets that oil prices will fall rather than rise have increased and oil prices have fallen below $100 a barrel this week as markets price in the prospect of a global recession and a possible hit to energy demand. Citigroup warned earlier this week that oil prices could fall to $65 a barrel by the end of this year and about $45 by the end of 2023 if the economy falls into recession. The official government inventory report to be released on Thursday is expected to show that US crude oil supply decreased by about 1.0 million barrels last week.