Oil prices fell on Wednesday, retreating from their highest levels in three months from the previous day, after industry data showed an increase in U.S. crude inventories. However, signs of a tightening global supply and hopes for stimulus measures in China helped limit the losses.
Brent crude futures dropped 32 cents, or 0.4%, to $83.32 per barrel by 00:36 GMT. West Texas Intermediate (WTI) crude was priced at $79.35 per barrel, down by 28 cents or 0.4%.
U.S. crude inventories rose by about 1.32 million barrels in the week ending July 21, according to market sources citing figures from the American Petroleum Institute on Tuesday. Analysts surveyed by Reuters had forecast a decrease of 2.3 million barrels. Gasoline inventories fell by about 1.04 million barrels, while distillate stocks increased by approximately 1.61 million barrels. The U.S. government is set to release inventory data later on Wednesday.
Prices declined after Brent and WTI crude hit their highest levels since April 19 on Tuesday, amid concerns over supply tightening and commitments from Chinese authorities to support the world’s second-largest economy.
Oil prices have gained weekly four consecutive times due to anticipated reductions in crude supply because of production cuts by the Organization of the Petroleum Exporting Countries (OPEC) and its allies.
The latest government data released on Tuesday showed that Saudi oil exports fell by nearly 40% in May compared to the same period last year. Hiroyuki Kikukawa, head of NS Trading, a unit of Nissan Securities, noted, "The increase in U.S. crude inventories last week led to some selling," adding that investors also positioned themselves ahead of the Federal Reserve's monetary policy decision. Meanwhile, leaders in China, the world's second-largest oil consumer, pledged to enhance economic policy support.
