Investing.com – West Texas Intermediate oil remained lower in North American trade on Wednesday after data showed that oil supplies in the U.S. registered a surprise inventory build and U.S. production reached record levels. But gasoline inventories registered a much larger-than-expected draw and distillate stockpiles unexpectedly declined.
After an initial reaction extending losses, crude prices later recovered some lost territory. Crude oil for September delivery on the New York Mercantile Exchange lost 32 cents, or 0.42%, to trade at $66.84 a barrel by 10:50 AM ET (15:50 GMT), compared to $66.60 ahead of the report.
The U.S. Energy Information Administration said in its weekly report that crude oil inventories rose by 5.836 million barrels in the week ended July 14. Market analysts' had expected a crude-stock draw of 3.622 million barrels, although the American Petroleum Institute late Tuesday reported a supply increase of 0.629 million barrels, the second-largest in its history.
Supplies at Cushing, Oklahoma, the key delivery point for Nymex crude, decreased by 0.860 million barrels last week, the EIA said. Total U.S. crude oil inventories stood at 411.1 million barrels as of last week, according to press release, which the EIA indicated was “about 2% below the five year average for this time of year”.
The report also showed that gasoline inventories decreased by 3.165 million barrels, compared to expectations for a decline of 0.044 million barrels, while distillate stockpiles fell by 0.371 million barrels, compared to forecasts for a gain of 0.873 million.
The EIA also noted that U.S. production rose from 10.9 million barrels per day to a new all-time high of 11.0 million.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for September delivery dropped 30 cents, or 0.42%, to $71.86 by 10:52AM ET (15:52GMT), compared to $71.58 before the release.
Meanwhile, Brent's premium to the WTI crude contract stood at $5.08 a barrel by 10:53AM ET (15:53GMT), compared to a gap of $5.00 by close of trade on Tuesday.
U.S. crude and Brent have slumped 9.6% and 7.2% in the last week and a half as Saudi Arabia and other members of the Organization of the Petroleum Exporting Countries and Russia increased production and as some supply disruptions eased.
Libya reopened its ports and started exporting oil again after the closures of its oil field.
Iran, the world’s fifth-largest oil producer, filed a lawsuit at the International Court of Justice against sanctions imposed by the U.S. in May, alleging that they violated a 1955 bilateral treaty between the two countries. The Islamic country asked the sanctions to be lifted provisionally.
On Monday, the U.S. Treasury Secretary Steven Mnuchin said Washington might grant waivers to Iran oil purchases.
Elsewhere on Nymex, gasoline futures for August delivery rose 1.2 cents to $2.0250 a gallon by 10:54 AM ET (14:54 GMT), while the August contract for heating oil traded down 1.1 cents to $2.0587 a gallon.
Natural gas futures for August delivery traded down 1.1 cents to $2.729 per million British thermal units.