LONDON: Oil slipped below $74 a barrel on Wednesday pressured by an industry report that US stockpiles of crude rose unexpectedly and by higher Opec production, adding to indications of more ample supply.
On Tuesday, the American Petroleum Institute said crude inventories rose by 5.6 million barrels last week. Analysts had expected a decrease of 2.8 million. The US government’s supply report is due on Wednesday.
Brent crude, the global benchmark, dropped 40 cents to $73.81 a barrel by 0832 GMT, adding to a 1.8 per cent loss in the previous session. US crude was down 44 cents at $68.32.
“A fresh dose of price angst has come from an unexpected source,” said Stephen Brennock of oil broker PVM. “The US has been flying the flag for the drawdown in global oil stockpiles, yet the rebalancing paused abruptly last week,” he said, referring to the API report.
Last month, Brent fell more than 6 per cent and US crude slumped about 7 per cent, the biggest monthly declines for both benchmarks since July 2016. Oil also slipped on more ample supplies.
The Organization of the Petroleum Exporting Countries, plus Russia and other allies, decided in June to ease supply cuts that had been in place since 2017 after a glut was cleared.
Opec production rose in June, led by Saudi Arabia, and reached a 2018 high in July, a Reuters survey found on Monday, although declines from Iran and other producers limited the increase. — Reuters
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