Oil prices fell on Wednesday after data from the American Petroleum Institute (API) showed increased U.S. crude inventories in the week to Aug 10.
Brent Oil Futures for October delivery went down 0.2% to $72.33 per barrel at 13:00AM ET (5:00 GMT), while Crude Oil WTI Futures for September delivery also edged downwards by 0.4% to $66.78 per barrel.
U.S. crude inventories unexpectedly rose by 3.7 million barrels in the week to Aug. 10, to 410.8 million barrels, the API said, adding that crude stocks at the Cushing, Oklahoma, delivery hub also jumped 1.6 million barrels.
“The overall build of 3.66 million really did catch the market by surprise,” said Phil Flynn, senior market analyst at Price Futures Group Inc. in Chicago. “The build in Cushing, Oklahoma is raising concerns that maybe demand is softening just a little bit.”
The Energy Information Administration will release official U.S. fuel inventory data later in the day.
Trade tensions between the U.S. and China has been cited as headwind for global energy demand.
Analysts believe the tariff war between the two nations is likely to become more intense in the coming months. Given China is one of the major consumer of global oil, a weaker economy could potentially hamper its demand for crude oil and push oil prices down.
OPEC, in its monthly report Monday, said its member production for July (from secondary sources) rose 41,000 bpd to 32.32 million bpd, led by increases in Nigeria, Kuwait, Iraq and UAE. This was partially offset, however, by decreases in Saudi Arabia, Iran, Libya and Venezuela.
The rise in OPEC production comes just a few months after the oil cartel agreed to ease curbs on output restrictions, which had been put in place by the production-cut pact in November 2016 to rid excess crude supplies from the market.
OPEC agreed in June to raise output at a nominal increase of 1 million barrels a day (bpd) in an effort to stabilize oil prices and ease the threat of a global supply deficit amid expectations for a drop in Iranian exports.
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