Higher US crude stock pushes oil price down

London — Oil fell on Wednesday after data showed a surprise rise in US crude inventories and the US-Chinese trade dispute threatened oil demand, although Middle East tensions capped losses.

Brent crude futures were at $70.84 a barrel at 9.03am GMT, down 40 US cents. US West Texas Intermediate (WTI) crude futures were at $61.22 per barrel, down 56c.

US crude stockpiles rose last week 8.6-million barrels in the week to May 10 to 477.8-million, data from industry group the American Petroleum Institute showed on Tuesday.

This compared with analyst expectations for a decrease of 800,000 barrels.

Official data on stocks from the US energy department’s Energy Information Administration (EIA) will be released later on Wednesday.

On Tuesday, US President Donald Trump called the trade war with China “a little squabble” and insisted talks between the world’s two largest economies had not collapsed.

Oil prices have drawn support after Saudi Arabia said on Tuesday that armed drones struck two of its oil pumping stations, two days after the sabotage of oil tankers near the United Arab Emirates.

“Given that nearly one-third of global oil production and nearly all of global spare capacity are in the Middle East, the oil market is very sensitive to any attacks on oil infrastructure in this region,” Swiss bank UBS said, adding it expected Brent prices to rise toward $75 in coming weeks.

The attacks took place against a backdrop of US-Iranian tension following Washington’s decision earlier in May to try to cut Iran’s oil exports to zero and to beef up its military presence in the Gulf in response to what it said were Iranian threats.

The US military said it was braced for “possibly imminent threats to US forces in Iraq” from Iran-backed forces.

Meanwhile, oil cartel Opec said world demand for its oil would be higher than expected in 2019 as supply growth from rivals including US shale producers slows. That points to a tighter market if the exporter group refrains from raising output.

The International Energy Agency said the world would require very little extra oil from Opec in 2019 as booming US output would offset falling exports from Iran and Venezuela.

• With Aaron Sheldrick and Colin Packham