Oil prices slumped Wednesday after industry data showed US crude inventories increased more than expected, but supply concerns capped losses.
Brent crude futures for December fell $1.03, or 1.1%, to $92.49 a barrel as of 0635 GMT, after rising 26 cents in the previous session.
West Texas Intermediate (WTI) crude futures for December fell 75 cents, or 0.9%, to $84.57, reversing the previous session’s gains.
The prospect of a global economic slowdown and tighter monetary policy has outweighed the supply reduction spectrum in recent weeks.
U.S. crude inventories increased by nearly 4.5 million barrels in the week ended Oct. 21, according to market sources based on figures from the American Petroleum Institute (API).
That’s above the expectations of some analysts, who expect an average increase of around 200,000 bpd based on surveys.
The increase in crude oil inventories reinforces fears of a global recession that will reduce demand, while continued supply restrictions keep prices trading in a narrow range.
OPEC’s production cuts in November and new EU sanctions on Russian oil from December will be positive in terms of prices.
The wide spread of WTI-Brent in recent sessions indicates that WTI buyers expect further intervention from President Joe Biden ahead of the US midterm elections on 8 November.
Biden announced last week that he plans to release the remainder of the country’s record sales from its emergency oil reserve by the end of the year, as it tries to curb high gasoline prices.
The White House welcomed Saudi Arabia’s moves on Tuesday to assist Ukraine in its war with Russia, following the recent decision of the Organization of the Petroleum Exporting Countries (OPEC) and its Russian-led allies.
However, Criticized for high inflation, Biden warned that the Saudis would face the consequences of aligning with Russia and agreeing to cut raw supply.
Meanwhile, official US stock data from the government’s Energy Information Administration (EIA) will be released Wednesday at 1430 GMT.
