Oil prices threatened to fall through key technical levels on Wednesday after the government issued a bearish report on U.S. fuel stockpiles.
U.S. West Texas Intermediate crude futures fell nearly 4 percent, plunging to a five-week low below $45 a barrel, following the report. WTI last traded at $44.76, just $1 above the recent low of $43.76 struck on May 5.
Following a precipitous drop toward the May 5 low last week, analysts warned that WTI's next stop could be $42.20 a barrel, a level not seen since mid-November.
The U.S. Energy Information Administration reported that gasoline stockpiles rose by 2.1 million barrels in the week through June 9, versus expectations for a 457,000 barrel drop.
The surprise increase was another sign of persistently weak gas demand even as the summer driving season revs up. The four-week average for gas consumption is 1.2 percent below the year-ago level.
In addition, U.S. crude stockpiles fell by 1.7 million barrels, less than the expected decline of 2.7 million barrels.