Photo caption: Oil
Oil prices fell on Wednesday as traders eyed a potential jump in U.S. crude inventories, awaiting official weekly data later in the day and OPEC’s monthly oil report.
According to Reuters report, Brent crude futures fell 64 cents, or around 1%, to $65.99 a barrel by 0934 GMT. U.S. West Texas Intermediate (WTI) crude slipped 64 cents, or 1%, to $63.03.
“Definitely, the crude build in the API numbers was not of help. That said, the API report also contained supportive elements such as large refined product draws,” said UBS analyst Giovanni Staunovo.
Crude stocks were up by 4.3 million barrels in the week ended May 9, market sources said, citing American Petroleum Institute figures, while gasoline inventories fell by 1.4 million barrels and distillate stocks dropped by 3.7 million barrels.
The fall in gasoline inventories comes as countries get ready to enter the Northern Hemisphere summer driving season.
Roth Capital Markets analysts in a note late on Tuesday said that the draw in products shown in API data was positive for the oil complex in the longer term as it shows that the oil market was under-supplied.
Official weekly inventory data from the U.S. Energy Information Administration is due on Wednesday at 10:30 a.m. EDT (1430 GMT).
U.S. crude oil and gasoline stocks likely fell last week, distillate inventories likely rose and gasoline stocks potentially decreased, an extended Reuters poll found ahead of the data. [EIA/S]
OPEC is expected to release its monthly report later on Wednesday, with analysts pointing to supply numbers of secondary sources being the main focus.
Broadly, both crude benchmarks were trading close to two-week highs touched in the previous session.
“Oil had a good rally in recent days…so we are probably seeing some profit taking,” Staunovo added.
However, upside in prices was limited as concerns about demand remained.
Chicago Fed president Austan Goolsbee said on Wednesday that data showing temperate consumer inflation in April does not necessarily reflect the impact of rising U.S. import tariffs, and more data was needed to understand the direction of prices and the economy.
