Oil falls after data show increase in US stocks

Singapore — Oil prices fell on Wednesday, pulled down by a report of increased US crude inventories and as a darkening economic outlook stoked the expectation of lower fuel demand.

Front-month Brent crude oil futures were at $72.33 a barrel at 4.08am GMT, down 13c, or 0.2%, from their last close.

US West Texas Intermediate (WTI) crude futures were down 25c, or 0.4%, at $66.79 a barrel.

US crude stocks rose by 3.7-million barrels in the week to August 10, to 410.8-million barrels, private industry group the American Petroleum Institute (API) said on Tuesday. Crude stocks at the Cushing, Oklahoma, delivery hub rose by 1.6 million barrels, the institute said.

“Oil prices … fell after the API inventory data showed an unexpected crude build last week,” said William O’Loughlin, investment analyst at Australia’s Rivkin Securities.

Official US fuel inventory data is due to be published later on Wednesday by the Energy Information Administration.

Sentiment was also clouded by a darkening economic outlook which could start impacting oil demand, traders said.

The OECD’s composite leading indicator, which covers the western advanced economies plus China, India, Russia, Brazil, Indonesia and SA, peaked in January but has since fallen and slipped below trend in May and June.

World trade volume growth also peaked in January at almost 5.7% year on year, but nearly halved to less than 3% by May, according to the Netherlands Bureau for Economic Policy Analysis.

BMI Research said oil markets would “struggle for direction, as uncertainty around both the impact on supply from the Iranian sanctions and escalating trade tensions between the US and China persists.”

Reuters