Investing.com - West Texas Intermediate oil extended losses in North American trade on Wednesday, after data showed that oil supplies in the U.S. registered an unexpected inventory build.
Crude oil for July delivery on the New York Mercantile Exchange fell 67 cents, or 0.9%, to trade at $71.53 a barrel by 10:31AM ET (14:31GMT) compared to $72.02 ahead of the report.
The U.S. Energy Information Administration said in its weekly report that crude oil inventories rose by 5.778 million barrels in the week ended May 18. Market analysts' had expected a crude-stock draw of 1.567 million barrels, while the American Petroleum Institute late Tuesday reported a decline of 1.3 million.
Supplies at Cushing, Oklahoma, the key delivery point for Nymex crude, decreased by 1.123 million barrels last week, the EIA said. Total U.S. crude oil inventories stood at 438.1 million barrels as of last week, according to press release, which the EIA indicated was “in the lower half of the average range for this time of year”.
The report also showed that gasoline inventories increased by 1.883 million barrels, compared to expectations for a draw of 1.388 million barrels, while distillate stockpiles fell by 0.951 million barrels, compared to forecasts for a decline of 1.335 million.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for July delivery slumped $1.13, or around 1.4% to $78.44 by 10:36AM ET (14:36GMT), compared to $79.10 before the release.
Meanwhile, Brent's premium to the WTI crude contract stood at $7.00 a barrel by 10:37AM ET (14:37GMT), compared to a gap of $6.93 by close of trade on Tuesday.
Oil was already under pressure earlier on Wednesday after reports that the Organization of Petroleum Exporting Countries (OPEC) may decide to raise oil output as soon as June.
Worries over Iranian and Venezuelan supply along with the fact that Washington raised concerns the oil rally was going too far were cited as reasons that an output increase may be considered, according to OPEC and oil industry sources cited by Reuters.
Gulf OPEC countries are leading the initial talks on when the exporting group can boost oil production and how many barrels each member can add, the sources said.
OPEC and non-OPEC producers led by Russia have agreed to curb output by about 1.8 million barrels per day (bpd) until the end of 2018 to reduce high global oil stocks, but the inventory overhang has now fallen close to OPEC’s target.
Elsewhere on Nymex, gasoline futures for June delivery fell 3.3 cents to $2.2285 a gallon by 10:38AM ET (14:38GMT), while the June contract for heating oil lost 2.3 cents to $2.2571 a gallon.