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Oil retreats Wednesday on API's US inventory data

Oil retreats Wednesday on API's US inventory data

Mubasher: Oil prices dropped on Wednesday, driven by the hike of US crude stocks, despite the persisting impact of output cut deal supported by the Organization of the Petroleum Exporting Countries (OPEC) and looming US sanctions against Iran, OPEC's third-largest producer.

Brent futures, the global benchmark, were traded at $78.07 per barrel (pb) earlier on Wednesday, $0.36 lower than their last traded prices, while US Nymex crude futures were at $71.02 pb, $0.28 less than their last session.

Falling oil prices come ahead of the Energy Information Administration's (EIA) data pertaining the US crude oil inventories.

On Tuesday, the American Petroleum Institute (API) reported a surprise surge of 4.9 million barrels in US oil inventories to register a total of 435.6 million barrels for the week ended May 11.

On the other hand, spot crude oil cargo prices see their steepest discounts as traders struggle to sell West African, Russian and Kazakh crude cargoes, according to Reuters.

The API data pertaining the US crude inventories suits the upward trend of the oil market, while giving “at least a decent pause at the moment” for the recently climbing prices, chief market strategist at futures brokerage AxiTrader Greg McKenna told the news agency.

By 7:26 am GMT, US Nymex crude plunged 0.45% to $70.99 pb, while Brent futures dropped 0.45% to $78.08 pb.