BEIJING: Oil prices fell on Wednesday as an industry report showing crude and fuel inventories rose last week in the U.S., the world’s biggest crude consumer, reinforced mounting concerns that supply is exceeding demand in the market.
Brent crude futures dropped 28 cents, or 0.43%, at $64.61 a barrel as of 0200 GMT, after gaining 1.1% in the previous session. U.S. West Texas Intermediate crude futures were down 24 cents, or 0.4%, at $60.5 a barrel, after rising 1.4% on Tuesday.
U.S. crude and fuel stocks rose last week, market sources said late on Tuesday, citing American Petroleum Institute figures.
Crude stocks rose by 4.45 million barrels in the week ended November 14, while gasoline inventories climbed by 1.55 million barrels and distillate inventories increased by 577,000 barrels, the API reported, according to the sources.
A report on Wednesday from Chinese brokerage Haitong Futures said the API data showing the builds in crude and fuel inventories “pointed to weak demand and a bearish outlook for oil prices.”
Official U.S. government inventory data will be released later on Wednesday. Eight analysts polled by Reuters ahead of that data release estimated on average that crude inventories likely fell by about 600,000 barrels in the week to November 14.
Prices gained on Tuesday as investors considered the impact of U.S. sanctions on Russian oil exports and as Ukrainian attacks on Russian refineries and export terminals have increased concerns of crude and fuel disruptions.
The worries about Russian supply are being weighed against forecasts from analysts that oil output is in excess of current demand, which has pressured prices.
Following Ukrainian attacks on Russian energy and port infrastructure, profit margins for producing diesel fuel have surged in Europe, reaching their highest since September 2023 on Tuesday. This is occurring amid an increase in refinery margins globally.
The Haitong report noted that “oil prices have found support from the strong diesel market but the persistent crude oversupply is keeping investors cautious about chasing further gains in crude.”
U.S. President Donald Trump is willing to sign legislation making its way through Congress to add new Russian sanctions, a senior White House official said on Monday, as long as he retains final authority over its implementation.
Further secondary sanctions on Russian crude buyers should provide continued support for oil prices.
