Oil prices fall after significant increase in US oil inventories

Oil prices fall after significant increase in US oil inventories

Oil fell on Wednesday after rising more than 1% in the previous session, as US oil sector data showed that crude inventories increased more than expected; however, the prospect of deepening production cuts from OPEC and its allies prevented further decline.

Brent crude futures were down 23 cents, or 0.39%, at $59.47 a barrel by 06:52 GMT on Wednesday.

US West Texas Intermediate (WTI) crude for December delivery, the new contract for the nearest month, fell 32 cents, or 0.59%, to $54.16 a barrel. In addition, the earliest November contract expired on Tuesday at $54.16.

Data from the American Petroleum Institute (API) showed that crude oil inventories in the United States recorded a larger-than-expected increase last week, while gasoline and distillate stocks fell.

The API said that crude inventories rose by 4.5 million barrels in the week ending October 18 to 437 million barrels, compared with analysts’ expectations of an increase of 2.2 million barrels. Oil inventories at the delivery center in Cushing, Oklahoma, increased 2 million barrels.

Consumption of refineries rose by 129,000 bpd.

Gasoline inventories fell by 702,000 barrels, while analysts, polled by Reuters, had forecast a 2.3-million-barrel decline, API’s data showed.

Data also showed that distillate stocks, which include diesel and heating oil, fell 3.5 million barrels, while they were expected to drop 2.8 million barrels.

US crude oil imports last week rose 147,000 bpd to 7.1 million bpd.