Oil fell on Wednesday after data showed a surprise rise in US crude stockpiles and as Chinese industrial output grew less than expected in April, but prices were supported by mounting tensions in the Middle East. Brent crude futures were at $71.06 a barrel at 0646 GMT, down 18 cents, or 0.3 percent, from their last close. Brent ended 1.4 percent higher on Tuesday.
US West Texas Intermediate (WTI) crude futures were at $61.33 per barrel, down 45 cents, or 0.7 percent, from their previous settlement. WTI closed up 1.2 percent in the previous session.
US crude stockpiles unexpectedly rose last week, while gasoline and distillate inventories increased, data from industry group the American Petroleum Institute showed on Tuesday.
Crude inventories climbed by 8.6 million barrels in the week to May 10 to 477.8 million, compared with analyst expectations for a decrease of 800,000 barrels. Crude stocks at the Cushing, Oklahoma, delivery hub rose by 2.1 million barrels, the API said.
The US Energy Department’s Energy Information Administration (EIA) reports official numbers later on Wednesday. If the EIA report confirms a strong build we could see that weigh on oil prices … but too many geopolitical risks remain that should keep prices supported, Edward Moya, senior market analyst at OANDA told Reuters by email.
The world’s oil supply fell last month, the International Energy Agency said Wednesday, amid rising global tensions as US sanctions on Iran tightened and OPEC+ members produced less crude in line with their pact. In its latest monthly report on the global oil market, the Paris-based IEA said that while geopolitics and industry disruptions were clouding the outlook it believes that the market balance is set to flip from surplus into deficit, a development that would favor efforts by oil producing nations to keep prices high. — VoM