Investing.com - Crude oil prices face pressure in Asia on Wednesday after a U.S. industry report showed a larger than expected build in stockpiles last week.
On the New York Mercantile Exchange, WTI crude for June delivery was last quoted up 3.06% to $42.45.
The American Petroleum Institute's weekly crude inventory report after the close of trading showed a gain for crude stocks of 3.1 million barrels at the end of last week, well above the 1.6 million barrel increase seen.
On Wednesday, the U.S. Energy Information Administration (EIA) will report its own estimates.
Overnight, U.S. crude futures surged to fresh yearly-highs, erasing all of their losses from a failed accord in Qatar over the weekend, as Iranian officials said Tuesday that its production could return to pre-sanction levels in two months, providing indications that the Persian Gulf nation might be willing to engage in talks aimed at freezing output when OPEC meets next in June.
With the upward moves, WTI crude extended sharp gains from the previous session when U.S. crude futures staged a dramatic reversal to end the day above $41 a barrel.
On the Intercontinental Exchange (ICE), brent crude for June delivery wavered between $42.60 and $44.50 a barrel, before closing at $44.05, up 1.14 or 2.66% on the session. At session-highs, North Sea brent futures came percentage point away from hitting 2016-yearly highs of $44.94 from last week. Although the rally in brent futures has not been as pronounced as its U.S. counterpart, brent is still up by more than 40% since falling to 12-year lows in mid-February.
Crude futures rallied in overnight trading after Iran deputy oil minister Rokneddin Javadi told state-run news organization IRNA that he expects output to return to pre-sanction levels from 2011 by sometime in late-June. Separately, Iranian oil sources sent strong indications that the nation could be willing to enter negotiations regarding a potential production freeze when OPEC meets next on June, according to Reuters.
In April, Iran has reportedly increased exports to 1.75 million barrels per day, up from 1.6 million bpd a month earlier, shipping data provided to Reuters shows. By June, Iran hopes to ramp up production to reach 2011 levels near 4 million bpd and exports of around 2.2 million bpd.
Separately, oil continued to receive upside pressure from a labor stoppage in Kuwait where thousands of workers struck for a third consecutive day while railing for public sector pay reforms. The labor storage forced officials to slash crude production to 1.5 million bpd, according to Kuwaiti agency KUNA, severely below last month's average output of 2.8 million bpd.