Oil prices plunge to one-month low after US stocks rise

By Ovunc Kutlu

NEW YORK (AA) - Oil prices fell to their lowest level in a month on Wednesday after commercial crude stocks in the U.S. increased surprisingly against market expectations.

American benchmark West Texas Intermediate (WTI) lost 5 percent to reach as low as $45.78 per barrel -- its lowest level since May 8. Global benchmark Brent crude fell 4 percent to $48.11 a barrel -- its lowest level since May 5.

Commercial crude inventories in the U.S. rose 3.3 million barrels, or 0.6 percent, to 513.2 million barrels for the week ending June 2, the U.S. Energy Information Administration (EIA) said earlier. The market expectation for crude stocks was a decline of 3.5 million barrels.

"Last week’s unexpected jump in crude stocks was mainly driven by a rise in net imports," Thomas Pugh, a commodities economist at London-based Capital Economics, said in a note.

The U.S.'s oil imports rose 356,000 barrels per day (bpd) to 8.34 million bpd last week, according to the EIA data.

Crude prices, in addition, continued to remain under pressure after several Saudi-led Gulf states cut diplomatic ties with Qatar on Monday claiming national security concerns. WTI fell 0.5 percent on Monday, while Brent Crude lost almost 1 percent.

The deteriorating relations pose risk against the successful implementation of OPEC deal that was extended last month to limit member countries' oil production levels through next March, according to experts.