Oil down on Wednesday early trade

Oil prices fell in early Asian trading on Wednesday, reversing a brief rebound from the previous session. This decline followed industry data showing an unexpected increase in US crude oil and gasoline inventories, which outweighed global supply concerns.

Brent crude futures dropped 21 cents, or 0.27 per cent, to $76.27 a barrel by 0020 GMT. US West Texas Intermediate (WTI) crude fell 25 cents, or 0.34 per cent, to $72.95 per barrel.

According to the American Petroleum Institute (API), US crude oil, gasoline, and distillate inventories rose last week. Crude stocks increased by 176,000 barrels, against expectations of a 700,000 barrel decline. Gasoline inventories rose by 3.313 million barrels, contrary to an anticipated 1 million barrel draw, and distillate stocks increased by 1.217 million barrels, a larger build than expected.

Despite Monday’s lows, with Brent and WTI hitting their lowest prices since January and February respectively, both benchmarks recovered on Tuesday due to Middle East tensions raising supply concerns. Iran’s vow of retaliation against Israel and the US heightened fears of a broader conflict, potentially disrupting supplies from the region. Lower production at Libya’s Sharara oilfield added to these concerns.

The US Energy Information Administration (EIA) is set to release weekly inventory data at 10:30 am (1430 GMT) on Wednesday. The EIA reported that global oil inventories decreased by about 400,000 barrels per day (bpd) in the first half of the year and projected a further decline of around 800,000 bpd in the second half.

Attribution: Reuters