Brent crude oil was down about 6.5% at $28.96 per barrel at the London market close despite spending much of today on the advance.
According to Norwegian consultancy Rystad Energy, oil slid into reverse after earlier gains – on top of Monday’s progress – “as the market started realising that crude storages continue to fill”.
Bjornar Tonhaugen, Rystad’s head of oil markets, added: “The question was not if prices would stop rising but when. Indications show that for yet another week storage is continuing to fill up, despite shut-ins and output cuts.”
Covid-19 lockdowns have created a huge imbalance between oil supply and demand.
The FTSE 100 bucked the trend among leading financial markets today.
London’s blue-chip index rose 4.34 points, or 0.7%, to 5,853.76, but the German Dax and French Cac 40 indices both fell more than 1%.
Among oil stocks, BP was more than 1.6% lower at 313.7p, while Shell’s “A” and “B” shares shed 3.73% and 4.11% respectively.
Energy services firm Petrofac fell more than 5% to £1.74 despite it winning two three-year contract renewals, worth a total of more than £80 million in the UK North Sea.