Investing.com -- Crude oil futures were mixed on Wednesday, as increasing stockpiles in the U.S. and continued fighting in Yemen caused the spread between international and U.S. domestic benchmarks of crude to widen.
On the New York Mercantile Exchange, WTI crude for June delivery fell slightly to extend Tuesday's losses when it dropped by more than 2%. WTI reached a session-high of $57.11 in U.S. morning trading, before falling to $56.19, down 0.74% after energy traders digested the release of the Energy Information Administration's (EIA) weekly inventory report.
At the Cushing Oil Hub in Oklahoma, the EIA said its inventory grew by roughly 789,000 barrels last week to approximately 80% capacity, according to Genscape, Inc. The dwindling supply capacity has exacerbated concerns of a slowdown in production.
In addition, the EIA said crude production dipped by 18,000 last week marking the second consecutive week of worse than expected output. This comes after a grim outlook on short-term production earlier this month when the EIA said it expects U.S. shale field production to decline in May for the first time in four years.
The EIA forecasts that production in the Bakken formation in North Dakota will decline by 23,000 barrels to 1.3 million barrels per day, while production at Eagle Ford in South Texas will fall by 33,000 to 1.69 million bpd, dropping overall production from 5.02 million barrels in April to 4.98 million bpd in May.
WTI crude futures are still up more than 12% since falling to around $50 a barrel earlier this month.
As Saudi Arabia has pledged to keep crude production levels constant, the international benchmark of crude has also gained more than 10% on the month. On Wednesday, brent crude for June delivery on the Intercontinental Exchange (ICE), rose 0.69 or 1.11% to 62.77 a barrel.
The spread between WTI and brent increased to $6.58, up from $5.50 a day earlier.
In Yemen, Saudia Arabia resumed air strikes on Houthi-targets in the city of Aden amid increased calls from the White House for a diplomatic solution to the month-long conflict. Yemen is strategically located on one of the world's largest chokepoints of oil.
"There's going to be no military solution to this problem, only one that is solved at the diplomatic table," White House spokesperson Eric Schultz told reporters on Wednesday.
In Houston, the conflict in the Middle East and the large supply glut in U.S. crude were among the most hotly debated topics at the IHS Energy CERAWeek conference, an annual international gathering of prominent energy industry leaders.
Crude oil futures are down roughly 50% since peaking above $100 a barrel last summer.
"There's a saying going around that $75 is the new $90," Kinder Morgan (NYSE:KMI) CEO Richard Kinder told CNBC. "I don't think in the long-term, sustainable future it can remain at $50 or $55. I think it will be marginally higher (in a year) than it is today."