Oil held losses near a four-month low as an industry report pointed to an increase in U.S. crude stockpiles, adding to bearish sentiment compounded by OPEC+’s plan to boost supply.

The American Petroleum Institute reported U.S. inventories expanded by 4.1 million barrels last week, according to people familiar with the data. Brent traded above US$77 a barrel after closing lower for a fifth session on Tuesday, while West Texas Intermediate was near $73.

The API also reported crude stockpiles increased at the storage hub at Cushing, Oklahoma, where the U.S. benchmark is priced. There was also a large build in nationwide gasoline and distillate inventories.

The API numbers show “clearly bearish stats,” said Bjarne Schieldrop, chief commodities analyst at SEB AB. “Rising inventories are an indication that demand may be weaker than assumed on paper,” he said.

Oil has tumbled around five per cent this week following a decision by OPEC+ on Sunday to start unwinding supply cuts in the fourth quarter, despite concerns over demand and higher output from outside of the group. Traders who rely on trend-following algorithms have compounded the selloff.

While the Organization of the Petroleum Exporting Countries and its allies have spooked the market with their decision, RBC Capital Markets LLC predicts the group will “hit the kill switch” on returning supply if weakness persists. Most analysts had expected OPEC+ to extend curbs through to year-end.

Prices:

• Brent for August settlement was little changed at $77.48 a barrel at 9:54 a.m. in London.
• WTI for July delivery was steady at $73.18 a barrel.