Oil prices fell sharply on Wednesday after the Energy Information Administration reported a substantial increase in crude oil inventories. The rise in inventories, which exceeded analysts’ expectations, signals a potential weakening of demand and an oversupply situation in the market.

The news sent shockwaves through the trading floors, with West Texas Intermediate (WTI) crude dropping by more than 3% to settle at $58.50 a barrel. Brent crude, the international benchmark, also experienced a similar decline, falling to $62.00 a barrel.

Analysts attribute the inventory build-up to a combination of factors, including increased domestic production and lower refinery utilization rates. The report has intensified concerns about the global economic outlook and its potential impact on energy demand. Some experts believe that further price declines could be on the horizon if the supply-demand imbalance persists.