Matt Smith, director of commodity research at ClipperData, blamed the “solid build to gasoline inventories” for the big drop in oil prices. “Ongoing concerns about product demand is spooking the bulls, at a time that gasoline demand should be ratcheting up and driving on bigger crude draws.”
On Nymex, July gasoline RBN7, -0.02% shed 6.7 cents, or 4.5%, to end at $1.433 a gallon, while July heating oil HON7, -0.04% fell 3.8 cents, or 2.6%, to $1.410 a gallon. Both contract settled at their lowest since November.
Total domestic production also climbed by 12,000 barrels to 9.330 million barrels last week, after posting a decline a week earlier, according to the EIA.
“With U.S. shale producers continuing to demonstrate robust production growth, we remain concerned the window for net draws in the U.S. in [fiscal year 2017] is too narrow for total inventories to normalize,” said Chris Kettenmann, chief energy strategist at Macro Risk Advisors.
Meanwhile, a monthly report from the IEA Wednesday said the world’s oil oversupply will remain in place through 2017, as efforts by the Organization of the Petroleum Exporting Countries to restrain petroleum production have hit a wall in the U.S.
Read: Global oil glut to linger despite OPEC push, says IEA
Also see: OPEC oil production rose in May
But not all recent reports were bearish. BP PLC BP., -0.81% BP, -0.74% said its latest research report that global crude-oil production in 2016 saw its slowest percentage growth in seven years, as non-OPEC output marked its biggest drop in nearly 25 years.
Also on Nymex, natural-gas prices fell to its lowest finish since March, ahead Thursday’s EIA update on supplies of the fuel. July natural gas NGN17, +3.10% lost 3.3 cents, or 1.1%, to $2.933 per million British thermal units.
—Carla Mozée contributed to this article