Oil prices fell slightly on Wednesday (November 19th) as an industry report showed rising crude inventories in the United States, reinforcing concerns about oversupply, although the decline was limited by tightening fuel markets following attacks on Russian oil infrastructure.
Brent crude futures fell 44 cents, or 0.68%, to $64.45 a barrel at 09:23 GMT, after rising 1.1% in the previous session. U.S. West Texas Intermediate crude fell 46 cents, or 0.76%, to $60.28 a barrel, after rising 1.4% on Tuesday.
Prices rose on Tuesday due to tighter diesel markets due to falling Russian exports, said PVM analyst John Evans. US crude oil inventories rose by 4.45 million barrels in the week ending November 14, while gasoline inventories rose by 1.55 million barrels and distillate inventories rose by 577,000 barrels, market sources said late Tuesday, citing data from the American Petroleum Institute.
"Overall, the report is relatively bearish," said ING commodity strategists, although they cautioned: "Market participants appear more concerned about supply risks than the possibility of a future surplus."
US sanctions against major Russian producers, Rosneft and Lukoil, set a November 21 deadline for companies to end their cooperation with the Russian companies.
On Monday, the US Treasury Department said the sanctions, which have depressed Russia's oil revenues, are expected to curb its export volumes. Crude buyers in China and India have begun turning to alternative suppliers.
Concerns about Russian supply are offset by analysts' estimates that oil production is exceeding current demand, which has put downward pressure on prices.
Following Ukraine's attacks on Russian energy infrastructure and ports, diesel fuel profit margins surged in Europe, reaching their highest level since September 2023 on Tuesday, amid rising refinery margins globally.
Official U.S. government inventory data will be released later on Wednesday. Eight analysts polled by Reuters ahead of the release estimated that crude inventories likely fell by an average of about 600,000 barrels in the week to November 14. (alg)
Source: Reuters.com
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