Investing.com - West Texas Intermediate oil futures reversed gains in North America trade on Wednesday, after data showed that oil supplies in the U.S. rose sharply last week, underlining concerns over a slowing demand for oil products.
Crude oil for delivery in March on the New York Mercantile Exchange shed 9 cents, or 0.3%, to $29.79 a barrel by 15:35GMT, or 10:35AM ET. Prices were at around $30.35 prior to the release of the inventory data
The U.S. Energy Information Administration said in its weekly report that crude oil inventories increased by 7.8 million barrels in the week ended January 29. Market analysts' expected a crude-stock rise of 4.8 million barrels, while the American Petroleum Institute late Tuesday reported a supply gain of 3.9 million barrels.
Supplies at Cushing, Oklahoma, the key delivery point for Nymex crude, increased by 747,000 barrels last week, the EIA said, disappointing forecasts for a decline of 300,000 barrels.
Total U.S. crude oil inventories stood at 502.7 million barrels as of last week, remaining near levels not seen for this time of year in at least the last 80 years.
Gasoline inventories increased by 5.9 million barrels, compared to expectations for a gain of 1.7 million barrels, while distillate stockpiles decreased by 0.8 million barrels.
On Tuesday, New York-traded oil futures sank $1.74, or 5.5%, to close below the $30-level, as investors worried that a huge oversupply in crude was coinciding with a global economic slowdown, especially in China.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for April delivery tacked on 8 cents, or 0.24%, to $32.79. A day earlier, London-traded Brent futures plunged $1.52, or 4.44%, amid doubts over the likelihood of a deal between Russia and OPEC producers to cut output happening anytime soon.
Global crude production is outpacing demand following a boom in U.S. shale oil and after a decision by the Organization of the Petroleum Exporting Countries last year not to cut production in order to defend market share.
Oversupply issues will be exacerbated further as Iranian exports return to the global oil market. Tehran said Tuesday that it planned to increase crude exports to 2.3 million barrels per day for its fiscal year, starting March 21.
Meanwhile, Brent's premium to the West Texas Intermediate crude contract stood at $3.00, compared to a gap of $2.84 by close of trade on Tuesday.