NEW YORK: Oil prices fell slightly on Wednesday after US crude stocks posted their third unexpected weekly rise in four weeks, feeding worries about demand in the biggest oil market in the world. US West Texas Intermediate (WTI) futures fell by 50 cents, or 0.6%, to $80.33 a barrel by 11:40 a.m. ET (1540 GMT). Brent crude futures slid 39 cents, or 0.5%, to $84.62 per barrel.
The US Energy Information Administration (EIA) reported a 3.6 million barrel jump in the country’s crude oil stocks in the week ended June 21, surprising analysts were expecting inventories to draw down, according to a Reuters poll.
Rising US stockpiles are running contrary to declines elsewhere, UBS analyst Giovanni Staunovo noted. “I would call the oil market a tale of different stories,” Staunovo said. “We saw oil inventory draws in Japan and Europe last week. So it seems the market is tightening, just not yet in the US” UBS still expects oil prices to rise in coming weeks. Oil traders have worried about weak US gasoline consumption during the country’s peak summer driving season.
US gasoline use represents around 10% of total world oil consumption, and gasoline demand in the country last week was down 3.6% from a year ago to around 8.9 million barrels a day. Stocks of the fuel rose unexpectedly even as refiners cut back output.
“These statistics are certainly going to disappoint the gasoline bulls,” said Andy Lipow of Lipow Oil Associates in Houston. “Absent a hurricane, we have adequate supplies for the summer driving season with July 4th right around the corner.”
A stronger US currency also weighed on oil prices, making dollar-priced oil more expensive for buyers holding other currencies. The US dollar index was last up 0.4%. On the geopolitical front, Houthi attacks on shipping in the Red Sea and mounting Israel-Hezbollah hostilities in Lebanon have been supporting oil prices.
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