Crude oil prices slipped Wednesday after U.S. crude inventories soared to their highest point in 19 months, as production set a record, Kallanish Energy reports.
The declines were somewhat tempered by the intensifying crisis in Venezuela and Washington’s stopping Iranian oil sanction waivers as of Wednesday, with the fall in the global Brent benchmark more muted.
U.S. West Texas Intermediate crude oil futures settled 31 cents lower, at $63.60 per barrel. Brent crude futures were down 2 cents, at $72.04/Bbl at roughly 2:10 p.m. ET.
U.S. crude inventories last week jumped 9.9 million barrels (Mmbbl), to 470.6 Mmbbl, as exports grew to the highest volume since January, and refining rates dropped below 90% of total capacity, the Energy Information Administration said. (See story elsewhere in this issue.)
The build far outstripped analysts’ expectations of an increase of just 1.5 Mmbbl.
Markets also were watching developments in Venezuela, where opposition leader Juan Guaido called for an uprising against President Nicolas Maduro.
Many observers fear such a move could lead to escalating violence and further disruptions to crude supply.
Crude prices have risen over 30% so far this year, and in April, Brent increased roughly 6.5%, and WTI rose 6.3%, their fourth consecutive month of gains.
Oil markets have already tightened this year due to supply cuts of 1.2 million barrels per day since Jan. 1, by members of Opec+. The group of producer-nations includes most of Opec, along with a number of non-Opec producers led by Russia.
Market tightening also has been influenced U.S. sanctions on Venezuela and Iran.
Washington’s waivers to the Iranian sanctions for eight countries, led by China and India, ended yesterday. The Trump administration says it aims to drive down Iran’s crude exports to zero.
Weekly U.S. oil production reached a new high of 12.3 million barrels per day (Mmbpd), EIA reported.
This post appeared first on Kallanish Energy News.