Oil fell as traders weighed contradictory assessments of US crude inventories before the release of government data later on Wednesday.
Futures slid 0.6 per cent in New York. The American Petroleum Institute was said to report a 2.13 million-barrel drop in stockpiles, while a Bloomberg survey forecast a 2.5 million-barrel gain.
Crude has increased almost 20 per cent this year on concern that US sanctions on Iranian crude — as well as supply losses in Venezuela and elsewhere — will leave global markets stretched. While the Organisation of Petroleum Exporting Countries and its allies insist they’re committed to raising output, questions remain over their spare capacity. Meanwhile, geopolitical tensions continue to hound sentiment, with the trade war ongoing between the US and China.
“Our basic premise is that prices will move higher,” said Harry Tchilinguirian, head of commodity-markets strategy at BNP Paribas SA in London. “As Iran’s supply losses are fully realised and Venezuela suffers continuous decline, global spare production capacity will ebb and — against a backdrop of average inventories — the market will become more sensitive to adverse supply shocks.”
West Texas Intermediate for November delivery traded down 40 cents at $71.52 a barrel on the New York Mercantile Exchange at 11:30am. London time. Total volume traded was about 5 per cent below the 100-day average.
Brent for December settlement slipped 26 cents to $81.15 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude was at a $9.76 premium to WTI for the same month.
In the US, crude stockpiles at the storage hub of Cushing, Oklahoma, rose by 1.5 million barrels last week, according to the API. That would be the fourth consecutive increase if confirmed by the Energy Information Administration’s data Wednesday.