Investing.com - WTI crude oil prices settled at two-month lows Wednesday after data showed a an unexpected build in US crude supplies, while domestic production resumed expansion.
On the New York Mercantile Exchange crude futures for September delivery fell 3% to settle at $65.01 a barrel, while on London's Intercontinental Exchange, Brent fell 2.10% to trade at $70.94 barrel.
Inventories of U.S. crude rose by 6.805 million barrels for the week ended Aug. 10, missing expectations for a draw of 2.449 million barrels, according to data from the Energy Information Administration (EIA).
The unexpected build in crude supplies emerged as imports rose by about 1.341 million barrels a day (bpd) while exports fell by 2.58 million bpd, data from EIA showed. An increase in refinery activity, which tends to support demand for crude, did little to limit the build in stockpiles.
Refinery activity rose to 98.1% of their capacity last week from 96.6% a week earlier, with inputs averaging about 18.0 million barrels per day during, up 383,000 barrels from the prior week, the EIA said.
Gasoline inventories – one of the products that crude is refined into – fell by 6.805 million barrels, beating expectations for a draw of 0.583 million barrels, while supplies of distillate – the class of fuels that includes diesel and heating oil – rose by 3.566 million barrels, against expectations for a build of 0.964 million barrels.
U.S. oil production rose for the first time in three weeks to 10.9 million bpd from a record high 11 million bpd reported in late-July.
Signs of dwindling demand for Iranian crude from buyers helped strengthen expectations for steeper losses of Iran crude from the market, keeping a lid on downside momentum in oil prices.
India, the second biggest crude customer for Iran, is reportedly considering slashing its imports of Iranian crude by half to secure a waiver from the U.S. to continue with imports, Bloomberg reported Tuesday, citing people familiar with the matter.
After pulling the United States out of the Iran nuclear agreement in May, President Donald Trump paved the way for sanctions against Iran to snap back into place that are expected to cripple Iran's energy infrastructure and oil exports.
Oil prices were also pressured by a rise in the dollar as investors seemingly flocked to the greenback as worries mount that the financial crisis in Turkey could spill over into other markets, triggering a systemic slowdown in global growth, which would hurt oil demand.