World oil prices sank further this evening, wiping out earlier gains, as traders digested news of a surprise jump in crude inventories in top consuming nation the United States. US crude fell $1.41 to $98.88 a barrel, while Brent crude shed 35 cents to $114.18.
The US Department of Energy (DoE) revealed today that American crude reserves soared by 2.9 million barrels in the week ending May 27, indicating weaker energy demand.
That surprised the market because expectations had been for a drop of 1.2 million barrels. Separately, industry group the American Petroleum Institute also announced that US crude reserves has swelled by 3.5 million barrels last week.
Crude had fallen sharply on Wednesday, weighed down by weak economic data that has sparked serious concern about the energy demand outlook. Markets were rattled by grim jobs and manufacturing figures that revealed deep weaknesses in the US economy.
Oil traders are looking ahead to the June 8 output meeting of the Organisation of Petroleum Exporting Countries (OPEC) in Vienna.
Prices have been weighed down by speculation that the cartel could decide to lift output next week to compensate for Libyan oil production, which has been ravaged by unrest.
