Oil lost more of the ground it had gained early this week as U.S. crude and gasoline inventories increased, undercutting expectations for tightening supplies.

West Texas Intermediate dipped 0.3 per cent, its second straight day of minor losses, after a U.S. government report showed oil stockpiles rose 3.17 million barrels last week. Still, the gain was about a third of the 9.3 million-barrel increase projected by the industry-funded American Petroleum Institute on Tuesday.

Crude has rallied this year on Ukrainian drone attacks on Russian oil infrastructure and extended supply cutbacks by OPEC and its allies. Meanwhile, a challenging economic outlook in China and robust non-OPEC supply growth remain headwinds. 

Gasoline futures, which in previous weeks played into crude’s bullish tone, traded at the lowest in almost two weeks. U.S. stockpiles of the fuel rose 1.3 million barrels last week, according to Energy Information Administration, a reversal from the 4.4 million-barrel drawdown the API projected. Implied weekly demand was below 9 million barrels a day for the second week in a row, adding to the bearish sentiment.

“Given an approaching end of month, end of quarter and the long Easter weekend, it is understandable that a little froth comes off the markets,” said John Evans, an analyst at brokerage PVM. 

The generally more positive tone across markets in recent weeks has some banks calling for higher prices. JPMorgan Chase & Co. said Wednesday that crude could hit US$100 a barrel if Russia’s recent decision to cut output isn’t balanced by other measures. U.S. gasoline prices are also likely to hit $4 a gallon by May, the bank’s analysts, including Natasha Kaneva, wrote in a note. 


WTI for May delivery declined 0.3 per cent to settle at $81.35 a barrel.
Brent for May settlement fell 0.2 per cent to $86.09 a barrel.