SINGAPORE: Oil prices fell on Wednesday, with Brent dropping back below $70 per barrel and US West Texas Intermediate dipping below $65, pulled down by a report of increasing US crude inventories that surprised many traders.
US WTI crude futures were at $64.72 a barrel by 0700 GMT, down 53 cents, or 0.8 per cent, from their previous settlement.
Brent crude futures were at $69.69 per barrel, down 42 cents, or 0.6 per cent.
Traders said the falls came after the American Petroleum Institute (API) late on Tuesday reported a surprise 5.3 million barrels rise in crude stocks in the week to March 23, to 430.6 million barrels.
“Crude futures are trading lower in response to a surprise build in API data,” said Sukrit Vijayakar, director of energy consultancy Trifecta, in a note.
Official US inventory data will be published by the Energy Information Administration (EIA) on Wednesday.
Robert Carnell, chief economist and head of research at Dutch bank ING in Asia said on Wednesday that “more supply coming from the US” would also likely weigh on oil prices.
US oil production has already jumped by almost a quarter since mid-2016, to 10.4 million barrels per day (bpd), taking it past top exporter Saudi Arabia and within reach of the biggest producer, Russia, which pumps around 11 million bpd.
In Asia, Shanghai crude oil futures posted high volumes and volatile trade on their third day of trading.
Spot Shanghai crude futures were down 3.75 per cent on Wednesday, to 410.4 yuan ($65.37) per barrel by 0700 GMT.
In dollar-terms, that puts Chinese crude prices significantly below Brent and only slightly above US WTI.
Since Shanghai crude oil futures were launched on March 26, it would have been profitable to buy the spread between Brent and Shanghai crudes, which has risen from $1.60 per barrel on Monday to $4.60.— Reuters
Oman Observer is now on the WhatsApp channel. Click here
