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Oil Prices Subdued On Oversupply Fears

Oil prices fell slightly on Thursday to extend losses from the previous session after the Energy Information Administration (EIA) released a more bearish than expected inventory report.

Benchmark Brent crude slid 0.1 percent to $40.26 a barrel, after having fallen as much as 5.4 percent on Wednesday. U.S. West Texas Intermediate (WTI) crude futures were down 0.6 percent at $37.78.

According to the EIA report, crude oil stockpiles increased by 1.4 million barrels in the week ended June 19, significantly higher than an expected increase of about 300,000 barrels.

Gasoline stockpiles were down 1.7 million barrels last week, much more than the expected level. Meanwhile, distillate inventories were up 250,000 barrels, beating forecasts for a drop of over 600,000 barrels.

The American Petroleum Institute's inventory report released a day earlier showed that U.S. crude inventories rose by a much bigger than expected 1.75 million barrels for the week ending June 19, well ahead of analysts' expectations for a build of 300,000 barrels.

EU-US trade tensions, the IMF's slashing of its forecasts for global growth and a resurgence in coronavirus cases in some U.S. states and elsewhere also cast doubt on a recovery in fuel demand.

The U.S. broke its record for the highest coronavirus cases recorded in a single day, with 36,358 new positives reported on Wednesday, according to a tally by NBC News.

With some southern and western states reporting record number of coronavirus cases, New York, New Jersey and Connecticut have asked visitors from nine states with high infection rates to quarantine for 14 days.

"There is a massive outbreak of Covid-19 across the state of Texas," Governor Greg Abbott said in a television interview.

Australia recorded the biggest daily rise in cases in two months, raising concerns about a second wave of infections.

The International Monetary Fund on Wednesday predicted a deeper global recession than previously thought, raising concerns that energy demand may not pick up significantly in the near term.

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