NafteEmroz/U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are trading lower on Wednesday shortly after the regular session opening and ahead of the release of the U.S. Energy Information Administration’s (EIA) weekly inventories report at 14:30 GMT.
Today’s selling pressure is being generated by a higher-than-expected build in the weekly inventories report from the American Petroleum Institute’s (API) late Tuesday. Renewed tensions over U.S.-China trade relations are also pressuring prices. Saudi Arabia tried to settle the market by saying it was committed to a balanced and sustainable oil market.
At 12:32 GMT, July WTI crude oil futures are trading $62.22, down $0.91 or -1.44%. August Brent crude oil futures are at $70.63, down $0.68 or -0.88%.
The API reported another surprise build in crude oil inventory of 2.4 million barrels for the week ending May 17. Analysts were looking for a 2.53-million-barrel drawdown in inventories. Including this week’s data, the net build is 31.92 million barrels for the 21-week reporting period so far this year, according to the API data.
The API also reported a small build in gasoline stockpiles for the week ending May 17 in the amount of 350,000 barrels. Traders were pricing in a draw of 1.516-million barrels for the week. Distillate inventories fell by 240,000 barrels for the week, while Cushing rose by 870,000 barrels.
Crude oil is also feeling pressure from today’s risk-off trading session in the equity markets. At 14:30 GMT, investors will get the opportunity to react to the weekly inventories report from the EIA. It is expected to show a 1.2 million barrel draw. An unexpected build could put further pressure on oil prices.