Early on Wednesday, WTI crude oil prices are weakening as crude inventories in the US registered an unexpected increase over the previous week, even as the supply side remains pressured by Libya restarting production. At the time of writing, WTI crude oil is trading at around $41.44 per barrel.

According to the API report which released on Tuesday, crude stockpiles in the US rose by 584k barrels during the past week to around 490.6 million barrels. Economists had forecast a decline by 1 million barrels instead, and traders took the surprising rise to indicate weakness in demand, driving crude oil prices lower.

Demand concerns continue to dominate the mood in oil markets with the number of coronavirus cases exceeding 40 million and causing European countries to announce fresh restrictions in an attempt to contain the pandemic. The demand for crude oil declines when restrictions are imposed, keeping prices under pressure.

On the other hand, supply concerns are also deriving bearishness in oil markets, with Libya hiking its crude production after months of blockade. Even though OPEC and its allies have maintained their commitment towards deeper supply cuts, Libya is exempt from this and the additional oil supply has raised concerns of a possible glut in the markets.