Petroleum prices fell on Wednesday after U.S. government data showed an increase in crude stockpiles and on demand concerns linked to a protracted trade war between China and the United States.
However, analysts said oil markets remained tight amid supply cuts by the Organization of the Petroleum Exporting Countries and allies such as Russia, and as political tension escalated in the Middle East.
Brent crude futures were down 75 cents, or 1%, at $71.43 U.S. a barrel mid-morning Wednesday. U.S. West Texas Intermediate crude futures for July delivery were down 93 cents, or 1.5%, at $62.20.
Data released Wednesday by the U.S. Energy Information Administration (EIA) showed crude inventories rose by 4.7 million barrels in the week ended May 17, compared with analysts’ expectations for a decrease of 599,000 barrels.
Gasoline stocks rose by 3.7 million barrels, compared with analysts’ expectations in an economist poll for an 816,000-barrel drop. EIA data showed distillate stockpiles, which include diesel and heating oil, rose by 768,000 barrels, versus expectations for a fall of 48,000 barrels.
In a trade war between China and the United States, no further talks between top officials have been scheduled since the last round ended in a stalemate on May 10.
The conflict is weighing on economic growth forecasts and with that, oil demand predictions. The Organisation for Economic Co-Operation and Development (OECD) on Tuesday revised down its global growth forecast for the year.
