Oil prices slumped Wednesday after industry data showed U.S. crude inventories rose unexpectedly last week, pointing to a potential shortage in demand, but concerns over supply kept losses in check.
Brent crude futures fell 23 cents, or 0.2%, to $96.08 a barrel at 0323 GMT.
West Texas Intermediate (WTI) crude futures fell 28 cents, or 0.3%, to $90.22 a barrel.
American Petroleum Institute (API) crude oil figures show that distillate stocks are rising and gasoline stocks are falling. U.S. crude inventories increased by nearly 2.2 million barrels in the week ended Aug. 5, market sources and data show. However, according to analysts, crude oil inventories had been estimated to increase by about 100,000 barrels.
Official government data will be released today.
Crude demand destruction from a weakening global economy is unlikely to drive oil prices much lower given the low supply outlook. In this case, the decisions to be taken regarding the supply of petroleum products in the Iran nuclear deal negotiations are very sensitive.
The European Union on Monday released a text to revive the 2015 Iran nuclear deal that would boost Iran’s crude oil exports. A senior EU official said he expects the final decision on the proposal to be made within a few weeks.
Both oil benchmarks were volatile on Tuesday, rising and falling by more than $1 a barrel during the session, but fell slightly as investors weighed recession concerns with news that some oil exports were suspended in the Druzhba pipeline from Russia to Europe via Ukraine.
Ukraine has stopped oil flow from the Druzhba oil pipeline to parts of Central Europe as Western sanctions prevent Moscow from paying transit fees.
Flows along the southern route of the Druzhba pipeline were affected, while the northern route serving Poland and Germany continued uninterrupted.
Czech Republic pipeline company MERO said it expects Russian oil supply to the Czech Republic via the Druzhba pipeline to resume in a few days.
In addition to supplies, the operator of the giant Kashagan oil field in Kazakhstan has begun to gradually open production after an emergency shutdown last week due to a gas leak. The Kashagan oil field produces about 300,000 barrels per day.
According to a review, US oil refineries and pipeline operators expect energy consumption to be strong in the second half of 2022.
