After a five-day streak of gains, oil prices reversed course early on Wednesday after a dismal U.S. jobs report and ahead of EIA's weekly inventory report which will shed light on whether the U.S. oil glut has started to ease.
As of 10:04 a.m. EDT on Wednesday, WTI Crude was down 3.95 percent at $23.59 and Brent Crude had slumped by 3.10 percent on the day to $30.01.
Oil prices rallied in each of the past five trading sessions, with the U.S. benchmark topping $25 a barrel on Tuesday amid signs that demand is crawling back up with eased lockdowns in some U.S. states and major European economies.
Even U.S. President Donald Trump praised the move higher in oil prices in a tweet on Tuesday - "Oil prices moving up nicely as demand begins again!" - such a tweet from the U.S. President praising higher oil prices would have been unthinkable just four months ago.
Later on Tuesday, the price of oil continued to rise, despite the fact that the American Petroleum Institute (API) estimated another large crude oil inventory build, of 8.440 million barrels for the week ending May 1, as the demand destruction continues and storage space nears its upper limits.
Ahead of EIA's official commercial oil inventory report on Wednesday, oil prices erased early gains for the day and started slipping after the ADP National Employment Report showed that a stunning number of 20,236,000 people lost their jobs the private sector in the United States from March to April. Official U.S. unemployment figures are due out on Friday, and are expected to be equally dismal, or even worse. MarketWatch expects that U.S. unemployment rate has jumped to 15 percent-the highest on record-up from 3.5 percent unemployment rate just two months ago.
EIA's inventory report later on Wednesday will be the next big catalyst for oil prices.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More
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