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API data shows inventory increases last week US EIA weekly inventory report due today, but demand-side pessimism eases
(Reuters) – Oil prices fell on Wednesday as traders focused on a possible surge in U.S. crude inventories while OPEC cut its oil supply growth forecast for non-OPEC+ producers.
Brent crude oil futures fell 75 cents, or about 1.1%, to $65.88 a barrel by 1206 GMT. U.S. West Texas Intermediate (WTI) crude oil fell 75 cents, or 1.2%, to $62.92.
OPEC on Wednesday revised down its forecast for increased oil supplies this year from the United States and other producing countries outside the OPEC+ group. Supplies from countries outside OPEC+ are expected to rise by about 800,000 barrels per day in 2025, the Organization of the Petroleum Exporting Countries said Wednesday, down from last month’s forecast of 900,000 barrels per day.
“Certainly, the crude construction of the API numbers did not help. That said, the API report also included supporting elements such as the extraction of large-scale refined products,” said UBS analyst Giovanni Staunovo.
Crude oil inventories rose by 4.3 million barrels in the week ending May 9, while gasoline inventories fell by 1.4 million barrels and distillate stocks fell by 3.7 million barrels, market sources said, citing American Petroleum Institute statistics.
The drop in gasoline stocks comes as countries prepare to enter the northern hemisphere’s summer driving season.
Analysts at Roth Capital Markets said in a note late Tuesday that the product pull shown in API data will be positive for the oil complex in the long run, indicating oil markets are in short supply.
Official weekly inventory data from the U.S. Energy Information Administration is scheduled to be released Wednesday at 10:30 a.m. EDT (2:30 p.m. Japan time).
U.S. crude oil and gasoline inventories were likely to fall last week, distillate stocks likely to rise and gasoline inventories to fall, an extended Reuters poll conducted ahead of the data found.
In general, both crude oil benchmarks were trading close to their two-week highs reached in the previous session.
“Oil prices have been rising strongly in recent days and there is probably some profit-taking,” Staunovo added.
However, concerns about demand remained, limiting the upside in prices.
Chicago Fed President Austan Goolsby said Wednesday that data showing moderate consumer inflation in April does not necessarily reflect the impact of higher U.S. import tariffs and that more data is needed to understand the direction of prices and the economy.
Reporting by Seher Dareen in London and Jeslyn Lerh in Singapore. Editing: Ed Osmond, Kirsten Donovan
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