Oil drops 1.5 pct. on rise in US inventories, weaker outlook

Crude prices traded sharply lower on Wednesday after a worse-than-expected report from the American Petroleum Institute (API), stating a substantial increase in the United States crude stockpiles.

On Tuesday, traders learned that the API report showed a rise of 4.9 million barrels for last week. Meanwhile, market watchers also digested the Energy Information Administration (EIA) outlook that forecasted a weaker global oil demand growth for this year.

According to the report, the world crude demand expansion was down by 160 thousand barrels per day to 1.22 million barrels per day.

West Texas Intermediate for July delivery dropped 1.76 percent, changing hands for 52.33 dollars per barrel while the international benchmark Brent for settlements in August lost 1.72 percent to trade for 61.23 dollars per barrel.